Boymelgreen Capital Ltd. (TASE:BMGN) and its subsidiary Azorim Investment, Development and Construction Ltd. (TASE: AZRM) have sold their joint subsidiary Azorim Tourism Ltd. to Fattal Hotel Management Ltd. and AMA Hotels Ltd. in equal shares.
The deal was at a valuation of NIS 970 million. NIS 270 million was paid in cash, and Fattal will assume about NIS 700 million of Azorim Tourism's debt.
Boymelgreen owns 25% of Azorim Tourism and Azorim Investment owns 75%. Azorim Investment will receive NIS 202.5 million from the sale and Boymelgreen Capital will receive NIS 67.5 million.
The sale will greatly reduce Azorim Investment's debt and release the company from its guarantees to the banks for Azorim Tourism's debt, because Fattal will assume the NIS 700 million debt of Azorim Tourism.
Azorim Tourism owns 12 Sheraton hotels in Israel: two in Eilat, the Sheraton Eilat and 50% of the Rhodes Eilat; two at the Dead Sea, Novotel Dead Sea and Sheraton Dead Sea; three in Jerusalem, Ganei Moriah, Sheraton Plaza, and Novotel Jerusalem; two in Tiberias, Sheraton Plaza Tiberias and Mercure Tiberias; the Sheraton Moriah Tel Aviv; 33% of the Sheraton City Tower in Ramat Gan; and management rights to the Mercure Bat Yam.
Azorim Investment acting CEO Yaakov Siso said, "The sale of the hotels is part of the activity we're undertaking to improve the company's financial situation and soundness." Azorim Investment will report a loss of NIS 55 million for the second quarter of 2009.
Shaya Boymelgreen owns 89.78% of Boymelgreen Capital, which owns 63.83% of Azorim Capital. Both Azorim Investment and Boymelgreen Capital's shares were unchanged in early trading on the TASE at NIS 11.55 and NIS 10.04, respectively.
Published by Globes [online], Israel business news - www.globes-online.com - on July 8, 2009
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