Jerusalem Economy Ltd. (TASE:ECJM) (JEC), controlled by Eliezer Fishman, and Electra Real Estate Ltd. (TASE:ELCRE), controlled by Georg Salkind, are continuing their property sell-off, today announcing sales what amounts to a fire sale of their properties in Canada.
Electra Real Estate announced that it has hired Brookfield Financial to handle the sale of its portfolio of seven properties in Montreal. The financially troubled company books the properties at a value of C$169 million (NIS 600 million), and they carry an outstanding loan of C$97 million (NIS 343 million). The balance of the properties, net of the loan is NIS 202 million. The company expects to report a surplus pretax cash flow of NIS 255 million at the closing of the sale, which is expects in the fourth quarter. After the sale, the company will own a development business to convert office buildings into residential properties in Montreal.
Yesterday, Electra Real Estate sold an office building in Montreal for C$67 million. It will report free cash flow of NIS 20 million and a loss of NIS 3.5 million on the sale.
Fishman Holdings unit JEC and its wholly-owned subsidiary, Darban Investments Ltd., sold the 30,000-square meter Bridlewood Mall in Toronto for C$63 million (NIS 223 million). The own the property in equal shares, and book it at a value similar to the sale price, so they will report neither a profit nor loss on the sale, but they will each report free cash flow (before taxes and transaction costs) of C$15 million (NIS 52 million). The balance of the loan on the property is C$34 million (NIS 134 million). Most of the proceeds will be transferred when the sale is closed in late 2013, subject to certain conditions, including the consent of the mall's anchor store, and the buyer securing financing.
Yesterday, JEC announced that the buyer of the Northgate Mall in Saskatoon, Saskatchewan, had completed due diligence and that the closing of the sale is subject to only minor conditions. JEC sold the property for $61 million (NIS 216 million), which it will report in the third quarter.
The sale of the malls follows last month's sale of 15 properties in France, on which the company will report a profit of NIS 59 million.
JEC president CEO David Zvida. "The present deal follows a recent sale, which together generate substantial cash flow and greatly reduce the company's leverage. The company is pursuing its work plan, which is based on strengthening equity and financial ratios, while creating a return for shareholders."
Eliezer Fishman is the controlling shareholder in “Globes”.
Published by Globes [online], Israel business news - www.globes-online.com - on June 17, 2013
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