30% of Boymelgreen Capital's rights offering went unsold.
Shaya Boymelgreen has injected NIS 56.2 million into his Israeli real estate arm, Boymelgreen Capital Ltd. (TASE:BMGN), increasing his stake in the company to 89.7% from 82.9%. Boymelgreen Capital's rights issue was not an astounding success: Shaya Boymelgreen bought 1.62 million of the 2.3 million shares offered, and other investors bought just 2,900 shares. 29% of the offering went unsold.
Boymelgreen Capital held the rights issue at NIS 34.50 per share. The share price has fallen 68% in the past year, and the company's current market cap is NIS 141 million.
Shaya Boymelgreen controls Azorim Investment, Development and Construction Ltd. (TASE: AZRM) and other real estate companies through Boymelgreen Capital. The acquisitions were mainly financed by loans from Mizrahi Tefahot Bank (TASE:MZTF), and Boymelgreen Capital's high leverage has made the company into a kind of alternative investment to Azorim itself. The leverage has also raised the return on Boymelgreen Capital's bonds to 65%. The company posted a net loss of NIS 14.7 million and had a negative cash flow of NIS 220.2 million for the first quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on August 17, 2008
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