Israeli real estate development and construction company Hanan Mor Group (TASE: HNMR) has filed in the Tel Aviv District Court for a stay-of-proceedings. The request reveals that the company has run up heavy debts of NIS 2.7 billion.
The company says that over the past year, and especially in recent months, external circumstances, global and domestic, have led to a perfect storm of stagnation in the real estate market, a toughening of credit and financing terms, political instability, a growing and deepening social rift, and war.
To this unusual and exceptional set of circumstances," writes Hanan Mor, was added a heavy financial burden, in the form of quarterly interest totalling NIS 25 million for the creditors of the Sde Dov project consortium, who provided the company with financing for the purchase of unique, prestigious and rare land. The request was filed by Advs. Zuriel Lavie and Yossi Mandelbaum of the Lipa Meir law firm.
Hanan Mor is requesting a 90-day stay-of-proceedings and charges that Bank Leumi has 'taken advantage' of its situation. "In the second quarter of 2023," the request says, Leumi took advantage of the fact that the loans it provided for the purchase of land in Ramat Gan and Haifa reached their formal end and required repayment..,.. The position of Leumi was contrary to the expectation of Mor holdings, which believed that the loans would be extended until the date of entry into the project, as is customary.
"Other financial creditors of Mor Holdings, who financed the purchase of other lots (including those whose debt to them exceeds the debt to Leumi and those whose debt is lower than the debt to Leumi), continued to extend the loans for the land purchases, in accordance with the company's practice and assessments, and even supported it and came towards it in terms of its needs."
Hanan Mor Group's share price has fallen 90% over the past year, reflecting a market cap of just NIS 60 million.
Published by Globes, Israel business news - en.globes.co.il - on November 20, 2023.
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