Israeli commercial centers company G City (TASE: GZT) (formerly Gazit Globe), controlled and managed by Chaim Katzman is selling its executive jet. The company has seen its financial situation deteriorate in recent months as its share price has fallen sharply and its bond yields jump.
Sources close to G City have told "Globes" that the executive jet has been grounded and put up for sale in the US. Katzman is currently traveling on scheduled commercial flights.
Katzman lives mainly in Florida but regularly travels to visit the company's assets in Brazil, the US, eastern and northern Europe and Israel.
G City's current executive jet was purchased in 2016 for $8.8 million. Prior to that the company had owned a Gulfstream executive jet bought in 2007 for $35 million at a time when the aircraft were a popular status symbol for Israeli tycoons including Nochi Dankner, Lev Leviev, Shari Arison, the late Moti Zisser and others. After the financial crisis of 2008, which led to the collapse of some of their businesses, they were force to sell the aircraft.
G City is in the midst of realizing some of its assets for billions of shekels to service its huge debt, which is casting a shadow over the company. G City owes more than NIS 8 billion to bondholders in Israel. This week the company announced an agreement to sell a commercial center in Yavne to Carasso Real estate for NIS 154 million.
G City said that the sale would help reduce its debt by NIS 95 million. The company added, "Regarding the balance of the assets intended for sale, due to a plan announced by the company as mentioned, amounting to about NIS 4.2 billion shekels, talks are taking place for the sale of assets amounting to about NIS 2.4 billion. The company estimates that it will enter into binding agreements worth NIS 1.35-1.85 billion in the first half of 2023."
Investors are meanwhile not impressed, and as of today some of G City's bonds are trading at a double-digit yield of 12%-15%, while the bonds of parent company Norstar are trading at junk yields of 40%-60%.
G City's share price has fallen more than 50% over the past year, and its market cap is below NIS 1.8 billion. Norstar shares, which are mainly held by Katzman and Israel Canada, fell by about 60% to a current company value of only NIS 500 million. Norstar currently has two series of bonds totaling close to NIS 800 million.
Published by Globes, Israel business news - en.globes.co.il - on January 2, 2023.
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