The debt settlement at real estate developer Habas HZ Investments Ltd. (TASE: HABS) has taken a twist: the day that the offer by Aspen Group Ltd. (TASE:ASGR) to take over the company expired, it announced a binding offer by British private equity fund Duet Asset Management Ltd. to acquire Habas's main asset: Dutch REIT Nieuwe Steen Investments NV (NSI) (AEX:NISTI). Duet is offering €5.50 per NSI share, close to its market price and a third of the price Habas paid.
Aspen's offer involved a 50% write-off on Habas's NIS 450 million debt.
The prices of Habas's shares and two bonds rose sharply on the announcement.
Habas owns 74% of Habas Star BV, which owns 21% of NSI. Its partner in Habas Star is Mayer Cars and Trucks Ltd. owners Jacob Shachar and Israel Kass. Habas's leveraged acquisition of the NSI stake for NIS 800 million on the eve of the global financial crisis led to the company's downfall to insolvency and inability to pay its bondholders.
If Duet's investment materializes, Habas will use the proceeds to repay its debt to the Dutch Rabobank BA, which financed the NSI acquisition, and will also give Habas's bondholders cash in hand. Aspen Group's offer would have allowed Habas to keep NSI through a capital injection of NIS 70 million into Habas on top of the €1 million already injected, for a 51% stake in the company, with the rest going to the bondholders. Habas would also issue a new bond totaling NIS 70 million.
While Aspen Group's offer would give Habas's bondholders less now, it offers them a potential upside if NSI's share price rises. Given today's expiry of the offer, the bondholders will have to decide fast.
Published by Globes [online], Israel business news - www.globes-online.com - on August 8, 2013
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