They will invest $30 million in equity and bank loans to buy residential lots.
Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Bank of Jerusalem (TASE:JBNK), and Mizrachi and Sons Ltd. are negotiation a deal to collaborate in the purchase of three residential lots for $30 million altogether. So far as is known, this is the first time an insurance company and contractor are collaborating to buy lots.
Mizrachi and Sons and Clal Insurance will each own 50% of the lots to be purchased shortly in the center of the country. Each party will invest $3 million in the purchases. The Bank of Jerusalem will provide financial coverage for the remaining $24 million. The companies have no plans to set up a joint venture, but will merely collaborate in the transactions: Mizrachi and Sons will provide the lots and will be chief contractor for the buildings, Clal Insurance will provide guarantees under the Sales (Housing) Law (1973), and the Bank of Jerusalem will provide financial coverage and mortgages.
Mizrachi and Sons is participating in and Israel Land Administration (ILA) tender to buy land zoned for 81 apartments in Ashdod for an estimated $4 million. If it wins the tender, it will offer half the lot to Clal Insurance. If it loses the tender, it will offer Clal Insurance 50% of residential lots it is negotiating to buy in Petah Tivka and Holon.
In recent years, the Bank of Jerusalem has been one of Mizrachi and Sons’ main bankers, alongside Bank Tefahot.
Published by Globes [online], Israel business news - www.globes.co.il - on July 31, 2005