Azorim Investment, Development and Construction (TASE:AZRM) will buy the luxury Shlomo Towers residential project in Herzliya from Baranowitz A.Z. and Sons and Yehudit Rosenfeld for NIS 36.8 million. Azorim Investment president and CEO Eitan Soroka and receiver Gil Hershman reached an agreement yesterday. Azorim will complete construction of the building, which is in the early skeleton stage, and market the apartments and income-producing space.
Under the deal, Azorim will buy the land from Rosenfeld in a 34% deal, taking over a similar deal between her and Baranowitz signed several years ago, but cancelled three months ago.
Azorim has also assumed the project's NIS 27 million debt to Industrial Development Bank of Israel (TASE:INDD.P). Azorim will initially pay NIS 16.8 million. The parties also agreed that if Azorim sells the apartments for more than an average of $230,000 per apartment, including VAT, Industrial Development Bank will receive 20% of the difference between the average sale price and $230,000. It is believed that the bank will be able to recoup most of its credit under this method, which the bank preferred, after examining alternatives.
Shlomo Towers is a 20-storey high-rise with 90 luxury apartments. Only three apartments have been sold to date, not including the apartments Rosenfeld will receive under the percentage deal. Baranowitz has already sold most of the project's parking garage to the Herzliya municipality, as well as most of its office and commercial space. 630 sq.m. of commercial space, 690 sq.m. of office space and 57 parking spaces remain to be sold. The proceeds are estimated at NIS 75 million.
The deal will greatly improve Baranowitz's liquidity, and help it recover from its difficulties.
Published by Globes [online] - www.globes.co.il - on May 12, 2004