Delek Real-Estate Share Transfer Deal With CIM On Hold
13 September 2011 - 1:09AM
Dow Jones News
Struggling Israeli real-estate firm Delek Real Estate Ltd.
(DLKR.TV) said Monday that a deal to transfer a 51% stake owned by
its controlling shareholder Yitzhak Tshuva to a U.S. equity firm
has been shelved.
Delek Real Estate said it cannot continue to negotiate with U.S.
equity firm CIM Group Inc. under the terms of a memorandum of
understanding the two companies signed last month.
Instead the two parties have agreed to continue talks for 30
days and examine new directions of possible cooperation, the
real-estate firm said.
Israeli business tycoon Tshuva signed a memorandum of
understanding in August to transfer his 50.79% stake to CIM in
return for loans to pay back Delek Real Estate's bondholders.
Delek Real Estate has been selling properties since 2009 to meet
debt and bond payments after suffering large losses and write-offs
on properties because of the economic downturn. Delek Real Estate
owes bondholders ILS1.3 billion ($351 million), and has a total
consolidated debt of ILS15 billion.
Delek Real Estate invests in property in Israel, Canada and
Western Europe, and has a market capitalization of ILS64 million.
Tshuva also holds the controlling interest in Delek Group Ltd.
(DLEKG.TV), one of Israel's largest companies.
Shares of Delek Real Estate closed down 0.011 shekels, or 6.67%,
at ILS0.154 on Monday, in a lower Tel Aviv market.
-By Sara Toth, Contributing to Dow Jones Newswires;
saratoth@gmail.com