Boymelgreen borrowed NIS 730 million to buy Azorim at a company value of NIS 1.95 billion; its current market cap is NIS 265 million.
Mizrahi Tefahot Bank (TASE:MZTF) has agreed to reschedule the NIS 630 million debt owed by Boymelgreen Capital Ltd. (TASE:BMGN), controlled by Shaya Boymelgreen. The company will make annual payments of NIS 60 million.
Boymelgreen Capital CEO Gil Tobul declined to comment on the report. He only said, "We're fully cooperating with the bank to deal with the crisis."
Boymelgreen Capital borrowed NIS 730 million from Mizrahi Tefahot Bank in 2006 in order to acquire the controlling interest in Azorim Investment, Development and Construction Ltd. (TASE: AZRM). The acquisition was made at a company value of NIS 1.95 billion for Azorim, whose current market cap is NIS 265 million.
Boymelgreen Capital also financed the acquisition through a bond issue and other loans. The company now has NIS 3.5 billion in current liabilities and NIS 4.3 billion in long-term liabilities. The company's auditor appended a going concern warning to the financial report for the third quarter. The company's share has fallen 90% since January to give a current market cap of NIS 44 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 16, 2008
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