"The company has not yet published its financial report, but I hope that we'll do so by the end of today," Boymelgreen Capital Ltd. (TASE:BMGN) CEO Gil Tobul told bondholders today. US real estate developer Shaya Boymelgreen controls the company.
Tobul added, "The company had a plan for the sale of assets in order to meet its commitments. We're dealing with a crisis, which no here has ever experienced, and the sales failed. The offers we received for not solve the problems."
Tobul noted that subsidiary Azorim Investment, Development and Construction Ltd. (TASE: AZRM) is the main source of Boymelgreen's cash flow. "Our most important asset is Azorim, and we believe that, with the right management, it can emerge from it difficulties, and in the long term also serve the commitments and interests of everyone. We all have the same interest."
Aside from Boymelgreen's bonds, Mizrahi Tefahot Bank (TASE:MZTF) is the company's largest creditor. "The loan from Mizrahi Bank is secured. The debt exceeds NIS 600 million, and the main asset on which it has a lien is Azorim. The bank's conduct is responsible and measured."
At the meeting, Tobul was asked, "What about the next bond payment?"
Tobul repliedm "It is necessary to convene as fast as possible, but the company currently lacks the resources to pay. The solution will be wide-ranging. The current situation is under control, and it's necessary to act responsibly and sagaciously. We'll talk with the bondholders' representatives.
"The practical effect of all the offers we received would not have solved any problem. If we were to sell, there would be no change. On the contrary, we'd be left with fewer means to cope. In the current market climate, we can't get a price that would serve our debts, and it's necessary to wait for this before we can sell."
Investors asked, "Why not distribute Lagna Holdings Ltd. (TASE;LGNA) shares as a dividend in kind?"
Tubol replied, "I don’t know how much that would help, but it is being considered."
Tubol added, "I think that, in contrast to other cases, the situation at Boymelgreen Capital is straightforward. It has three assets and prices are at an unprecedented nadir. We took out loans against these assets, and in the current market conditions, we cannot get a price that allows us to repay our debt."
Megamot College director Naftali Mendelovich attended the meeting as the representative of 300 bondholders. He said, "The company is effectively bankrupt. They don’t have a shekel on hand. To the best of my knowledge, Shaya Boymelgreen personally has no money for the company. We have Azorim and its subsidiaries."
Boymelgreen Capital owns 64% of Azorim, Azorim Tourism Ltd. (directly and through Azorim), and 50% of the Assuta Medical Centers compound in the Tel Aviv. Azorim owns 74% of Lagna. Azorim develops projects in Israel, the US, and India (through Azorim International Holdings Ltd.) Lagna, which controls Engel Construction and Development Ltd. and its subsidiaries, develops projects in Israel, Eastern Europe, and the US.
Published by Globes [online], Israel business news - www.globes-online.com - on April 2, 2009
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