In the wake of his woes with Delek Group Ltd. (TASE: DLEKG), and its NIS 6 billion debt to bondholders who have agreed to reschedule it, Yitzhak Tshuva is also seeking the rescheduling of the debt of real estate company Elad Group, which he privately owns.
Elad Group coordinates Tshuva's North American real estate activites, which include income producing property (apartments for rent, offices and industrial parks) and the development of residential projects for sale.
Just before the outbreak of the coronavirus pandemic, Elad Group raised a NIS 563 million bond to institution investors in January through its Elad US unit. The bond is being traded at annual returns of 15.8% after its price has been eroded by 19% since its issue due to the coronavirus crisis and Tshuva's financial troubles.
Before January's bond issue, Elad had issued four series of bonds through another unit SPS Elad, for among other things expanding its income producing real estate portfolio in Florida. 57 of the 64 repayments of these bonds have already been made. But seven more repayments totaling NIS 113 million are still owed with NIS 53 million due in July and October 2020.
But the bondholders are also entitled to full repayment of their debt from last month due to a cut in Elad Group's credit rating to A minus. But SPS Elad is asking for bondholder to forego immediate repayment in exchange for a 0.5% hike in the interest on them. In addition, Tashuva is offering a lien on land at Amnon Bay on the northern shore of the Kinneret worth NIS 50 million with building rights for a hotel and commercial property.
Elad Group says that it will be able to repay the bonds after the sale of apartments it owns in New York and the operation of income producing property by Elad National. Other sources of income will be generated by its Star and Elad Canada units.
Published by Globes, Israel business news - en.globes.co.il - on June 15, 2020
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