Tel Aviv District Court Judge Eitan Orenstein today approved the Midtown Tel Aviv separation agreement. Under this agreement, Israel Canada Ltd. (TASE: ISCN) will acquire 37.5% of the Midtown Tel Aviv project from the receiver for Eurocom Real Estate for NIS 140 million. Eurocom Real Estate receiver Adv. Hagai Ullman led the deal.
The Midtown Tel Aviv project on Begin Road in Tel Aviv includes a residential tower and an office tower. Israel Canada, Eurocom Real Estate, and Electra Ltd. (TASE: ELTR) constructed the project. The project has been through tumultuous times in the past year, following the collapse of the Eurocom group and the appointment of a liquidator for the entire group and a receiver for properties owned by Eurocom Real Estate, the group's subsidiary, which were attached in favor of Mizrahi Tefahot Bank (TASE:MZTF). These attached properties include the Midtown Tel Aviv shares and a 54% controlling interest in Spacecom Satellite Communications Ltd. (TASE:SCC).
The sale of the stake in Midtown Tel Aviv featured disputes between Ullman and the partners in the project, but it was eventually agreed that a company controlled by Israel Canada would buy the shares. Under the terms of the agreement between the parties signed in early January, the deal will take place with two NIS 70 million payments: one on March 9 and the other on November 15.
In a hearing today before Judge Orenstein, Ullman stated that the debt to Mizrahi Bank was over NIS 275 million, so that even if the Spacecom shares are sold at their current market value of NIS 70 million, the bank will not recover the money owed to it.
In the hearing, Ullman remarked that the sale process itself took five months from the time that the court gave the go-ahead to sell the shares until a optimal deal was reached. "We took an unusual and active role to gain the interest of the large and relevant companies in this bid, including Melisron, Sela Capital, Ashtrom, Israel Land Corporation, IDB Development, and others - a great many companies. I contacted these companies and we held the meetings through Rachel Levin, a director on my behalf who helped me in the process. Obviously, we strove to maximize the proceeds under the circumstances," Ullman said in explaining his decision to sell the shares to Israel Canada at the agreed price.
Published by Globes, Israel business news - en.globes.co.il - on January 27, 2019
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