An international infrastructure fund has cancelled its planned €62 million in Kardan Water International Group (HK) Ltd., the Chinese water venture arm of, Kardan NV's (TASE: KRNV;AEX:KARD). The cancellation came just a day after Kardan CEO Shuki Oren tried to calm creditors' fears at a bondholders' meeting.
In a statement, Kardan NV said, "The parties decided to terminate the memorandum of understanding as they came to the conclusion that a final agreement will not be reached in the envisaged time frame." The original agreement was signed on July 6.
Kardan NV's situation has been deteriorating ever since "Globes" reported in early May that the collapse in the company's share price forced one of its controlling shareholders, Yosef Grunfeld, to increase his collateral for a NIS 120 million loan from Bank Hapoalim (TASE: POLI) in 2007 and to sign a debt rescheduling agreement. Since that report, Kardan's share price has fallen 60%, and its current market cap is NIS 254 million, compared with NIS 6.3 billion at its peak in 2007.
Prices for Kardan's bonds have also crashed and their yields have soared to junk-bond status of up to 33%. The company's bond debt is NIS 2.5 billion. Earlier this month, Standard & Poor's Maalot Ltd. cut the company's bond rating 11 grades to CC.
Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2012
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