Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has complete the sale of the "Sakia" site, and will post a capital gain of at least NIS 250 million on the sale. Sakia, the land Bezeq held at the Mesubim junction on Road 4, was sold to Naimi Towers Ltd. for NIS 497 million. The consideration could grow to NIS 550 million. Bezeq reported to the Tel Aviv Stock Exchange today that it received bank checks yesterday amounting to NIS 377 million (including VAT) representing the entirety of the balance due on the sale of the property.
The checks were placed in trusteeship until mortgage documents are filed with the Registrar of Companies, with one of them, for NIS 150 million, designated for payment in full of the betterment levy assessed on the property "without prejudice to proceedings that the company has instituted or will institute to bring about cancellation or a reduction of this levy."
After Bezeq announced the sale of the property, it was reported that the Israel Land Authority was demanding that the company should pay a permit fee for the plan to improve the property, amounting to NIS 148 million plus VAT. At the same time, the Or Yehuda Building and Planning Commission filed a demand for a betterment levy of NIS 143.5 million. Bezeq appealed against both demands, and in its latest financial statements it estimated that the amount of the permit fee and betterment levy that it would have to pay would be lower, possibly substantially lower, than the amount demanded.
The final amount that Bezeq has to pay will affect the size of the capital gain it will recognize in the second quarter of this year. If it has to pay the full amount, the capital gain will be NIS 250 million. If the company's claims are accepted in full, the capital gain will rise to NIS 450 million.
Bezeq has a market cap of NIS 6.7 billion, after a 33% decline in its share price so far this year, because of accounting write-downs that hit dividend distributions. Bezeq has projected a net profit between NIS 900 million and NIS 1 billion for 2019, and EBITDA (earnings before interest, tax, depreciation and amortization) of NIS 3.9 billion.
Published by Globes, Israel business news - en.globes.co.il - on May 6, 2019
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