Yitzhak Tshuva-controlled Delek Real Estate Ltd. (TASE: DLKR) has sold another office building in Canada. Subsidiary Delek Global Real Estate Ltd. has sold the Bell Tower in Montreal for C$281 million (NIS 1 billion) to Canada's Dundee Real Estate Investment Trust (TSX: UN-T), which will assume the C$117 million (NIS 418 million) balance of the loan on the property.
Delek Real Estate, which owns 85% of Delek Global Real Estate, books the value of the Bell Tower at C$253 million. The 28-storey 90,555-square meter building is mostly leased to Bell Canada Inc., AON Canada, and National Bank of Canada. Rental income totals NIS 104 million a year.
Delek Real Estate is due to make a NIS 220 million payment on its bonds at the end May and a further NIS 300 million payment in September. The upcoming bond payment is made possible by a NIS 60 million loan from a Canadian bank, while Tshuva injected NIS 155 million into the company between May 2009 and February 2011. The company's NIS 745 million loss last year created a NIS 1.4 billion shareholders' equity deficit.
Delek Real Estate's bond debt totals NIS 2 billion. Since Eral Meital took over as CEO in late 2009, the company has sold properties and subsidiaries in Israel and abroad for NIS 2.5 billion, not including today's sale. Last November, it announced that it planned to sell its Canadian portfolio for over C$500 million.
Delek Real Estate will need NIS 1.9 billion in financial resources this year to repay its NIS 764 million in bank credit, NIS 664 million in bond installments, and NIS 473 million in credit to affiliated companies.
Delek Real Estate's share price rose 3.9% by early afternoon to NIS 0.56, giving a market cap of NIS 209 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011