Beny Steinmetz pays Scorpio debt from his own pocket

Beny Steinmetz  photo: Aviv Hofi
Beny Steinmetz photo: Aviv Hofi

Steinmetz has transferred to Bank Hapoalim the first of three payments as guarantor of real estate company Scorpio's €20 million debt.

Last Thursday, billionaire Beny Steinmetz transferred to Bank Hapoalim (TASE: POLI) the first of three payments on account of the debts of his real estate company Scorpio. As revealed by "Globes", Steinmetz agreed with the bank on rescheduling of the company's €20 million debt, with himself as personal guarantor.

Up to now, Bank Hapoalim has not been asked to write off credit it provided to Scorpio. In the two bond settlements signed by the company to date, the bank also obtained a guarantee from Steinmetz for full payment of his debt to it. As far as is known, since the second bond settlement was signed in July 2016, Steinmetz has paid the bank tens of millions of shekels from his own pocket in accordance with the debt payment terms.

According to a letter from Scorpio to Hermetic Trust in March 2018, Scorpio did not have enough cash in December 2017 to meet its €3.8 million (NIS 16 million) debt payment. It also stated that it did not expect to have enough cash to meet the subsequent payments in April 2018 and January 2019 (€8.1 million each). Scorpio therefore contacted the bank with a request for postponement of its debt payments and a waiver of the accumulated interest on the arrears of its debt.

According to the letter, Bank Hapoalim granted Scorpio's request and agreed to insert changes into the revised agreement according to which three payments would be delayed: one in June 2018, the second at the end of March 2019, and the third at the end of September 2019. Interest on the unpaid debt was increased by 1% to LIBOR plus 3%, with Steinmetz making the additional payment instead of the company. At the same time, Bank Hapoalim granted Scorpio's request to forgive payment of interest in arrears on its debt if the company meets these revised payments, the first of which is at the end of the current month.

Last month, "Globes" reported that Scorpio's bondholders convened a meeting after learning that the real estate company was unable to meet its NIS 20 million debt payment due at the end of the month under the terms of the debt arrangement signed two years ago. The bondholders believe that Steinmetz, who has already poured huge sums into Scorpio in order to support the company, will be forthcoming once more. Under the terms of the arrangement, he has 90 days to do so from the date on which the company fails to make its scheduled payment.

Scorpio develops and builds income-producing residential real estate in Eastern Europe. The company entered a severe crisis caused by a collapse in the value of its real estate that caused the company huge losses and cash flow problems. Scorpio was unable to repay its debts, and its auditors attached a going concern warning to the company's financial statements.

Starting in late 2009, Scorpio negotiated a debt settlement with its creditors, bondholders and Bank Hapoalim, during which the bank demanded immediate repayment of Scorpio's NIS 100 million debt to it. A debt settlement was eventually signed in early 2011 in which Steinmetz put $100 million into Scorpio as part of a rescheduling of its debt.

The company was still in dire straits, however, and a further decline in its situation in 2014, following the tension between Ukraine and Russia, destabilized Scorpio's business in those countries. A second debt settlement was reached in July 2016 following prolonged negotiations between the parties. This settlement included a NIS 72 million write-down of Scorpio's bond debt from NIS 240 million to NIS 168 million.

Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Beny Steinmetz  photo: Aviv Hofi
Beny Steinmetz photo: Aviv Hofi
Orit Strook  credit: Marc Israel Sellem/The Jerusalem Post Finance C'ttee approves NIS 300m coalition funds distribution

The money will mainly go to Religious Zionist party minister Orit Strook's Ministry of Settlements and National Missions.

Dangoor Academy  credit: British Embassy in Tel Aviv British Embassy showcases Israeli healthcare startups

The nine startups participated in the Dangoor HealthTech Academy, a program that connects Israeli startups with the UK healthcare system.

NextVision Stabilized Systems  credit: Shlomi Yosef/Tali Bogdanovsky Next Vision shareholders make NIS 230m exit

A British hedge fund has bought a 2.5% stake in the stabilized cameras company.

Energean CEO Mathios Rigas at the Israel Business Conference   credit: Shlomi Yosef Energean's $1b gas fields sale at risk

The sale of the energy company's asset portfolio in Egypt, Italy and Croatia may fall through because of the buyer's difficulties with the Italian regulator.

Kela Technologies founders Jason Manne, Hamutal Meridor, Alon Dror and Omer Bar Ilan  credit:  Yosef Haim Alterman Defense tech co Kela raises $39m

In response to the events of October 7, Kela has developed a platform for rapid integration of commercial technologies into military systems.

Benjamin Netanyahu  credit: ‎Alex Kolomoisky, Yediot Aharonot Firing the Shin Bet chief: The hurdles

Prime Minister Benjamin Netanyahu says he has "lost trust" in Shin Bet head Ronen Bar. Will this be enough to overcome legal challenges to his dismissal?

Emiliano Calemzuk  credit: PR CEO and "investor group" buying out Reshet 13

CEO Emiliano Calemzuk and the other investors will hold 74% of the television channel, while Len Blavatnik’s Access Industries and WBD will remain with 26%.

Inflation  credit: Tali Bogdanovsky Unexpectedly low February CPI reading cuts inflation

While inflation in Israel in the 12 months to the end of February 2025 is lower than forecast, housing prices continue to rise.

Yitzhak Tshuva credit: Gidon Levy and Tali Bogdanovsky Competition Authority allows Delek takeover of Isracard

The Competition Authority is considered the easier of the two regulatory hurdles that the deal must overcome, the other being the Supervisor of Banks.

David Amsalem  credit  Noam Moskowitz, Knesset Spokesperson's Office Rafael to pay state NIS 444m dividend

The minister in charge of the Government Companies Authority, David Amsalem, has approved the payment by the defense company.

Barak MX air defense system  credit: IAI IAI profit jumps 55%

Israel Aerospace Industries posted a net profit of $493 million for 2024, and ended the year with an all-time high orders backlog of $25 billion.

A TSG system in tactical use  credit: PR TSG signs cooperation agreement with US defense co

The agreement includes the integration of TSG's advanced technologies into sensor-based defense systems, which will be integrated into the operational systems of US defense units.

Bria CEO Yair Adato credit: Kseniia Poliak Israeli visual generative AI co Bria raises $40m

Bria’s Visual Generative AI platform empowers businesses to create predictable, controllable, and on-brand content that aligns with their visual language.

Amnon Shashua and Aviram Ziv credit: Eyal Izhar OrCam stymied by investor dispute with Shashua

Demands by institutional investors are blocking the visual and hearing impairment device developer's recovery plan.

Work on the Green Line credit: Bar Lavi Egged wins tender to operate TA light rail Purple, Green Lines

NTA awarded the tender to Egged, which already operates the Red Line, despite government ministry opposition to one operator for the entire network.

Gabi Seroussi illustration: Gil Gibli Board chooses Seroussi as IAI chair as Erdan freezes candidacy

Israel Aerospace Industries board chose Gabi Seroussi as chair even though he did not to go through the preliminary process of the Government Companies Authority appointments review committee.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018