Real estate company Mydas Real Estate Investments Ltd. (TASE: MYDS) Investments signed an agreement yesterday for the sale of 18% of project company Amta that holds the commerce and leisure site Ganei Sarona in Tel Aviv. The sale is due to Mydas's need for cash to pay its debts. Mydas sold the stake to one of its partners in the project, Reit 1 (TASE: RIT1) , which will pay NIS 18 million plus VAT. The sale proceeds are similar to the amount that Mydas has to pay this month to its series B bondholders.
Mydas currently owns 51% of the Ganei Sarona project. Its stake is entirely mortgaged to the series B bondholders, and it has to obtain approval from the bond trustee to change the collateral. The deal is subject to further conditions, which must be fulfilled by July 22. The price will adjusted according to a mechanism agreed between the two sides.
On the announcement of the deal, Mydas's share price jumped 20% yesterday afternoon, partly offsetting a 30% decline since the beginning of this year. The company's market cap is still below NIS 30 million. Mydas's first quarter financials released at the end of May showed that it would have difficulty in meeting the payment due to its bondholders.
The Ganei Sarona (Sarona Gardens) site has fifteen Templar buildings designated for preservation on the south west side of the military headquarters site in central Tel Aviv. This is one of the highest value areas in Tel Aviv, and it has developed considerably in the past few years with the construction of several office and residential towers.
In its first quarter financials, Mydas reported a rise in vacant space in the project, leading to a 10% fall in the rents that it produces, which totaled less than NIS 2.5 million in the quarter. The site is valued at NIS 227 million, with the company posting revaluation losses of NIS 30 million in the period 2015-2017.
Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2018
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