Sources inform ''Globes'' that any buyer of Azorim Investment, Development and Construction Ltd. (TASE: AZRM) would have to inject NIS 150 million into the company in order to reduce its leverage. The sources added that Azorim's controlling shareholder Boymelgreen Capital Ltd. (TASE:BMGN), and its largest creditor, Mizrahi Tefahot Bank (TASE:MZTF) are planning an expedited auction of the company between potential buyers.
The auction process will last a few weeks, and is unlikely to be completed before the end of the year, belying other media reports from today. Boymelgreen Capital will shortly announce the start of the auction.
Parties that have expressed interest in buying the controlling interest in Azorim include Success Parking Ltd. owner Tsahi Merkur, Yakir Sha'ashua, and Pangaea Real Estate Ltd. (TASE:PNGD). The sources said that both British-Israel Investments Ltd. (TASE: BRTS) and Kardan Israel Ltd. (TASE:KRIS) have also expressed interest in the company.
The sources added that 15 companies had expressed interest in Azorim, and three weeks remain to submit bids. At that point, the auction will begin.
Boymelgreen Capital owes Mizrahi Tefahot Bank NIS 650 million but the Azorim shares used for collateral are now worth only NIS 400 million, a third of the value at which Boymelgreen acquired Azorim three years ago. The bank will therefore probably demand that Azorim's buyer inject capital into the company to reduce the debt.
Mizrahi Tefahot Bank CEO Eli Yones wants to sell Azorim at a premium on its current market cap of NIS 543 million. A 10% premium has been mentioned lately, but sources close to the sale said that some buyers have offered a higher premium.
Boymelgreen Capital, controlled by Shaya Boymelgreen, owns 64% of Azorim. Azorim's share price fell 0.4% by midday to NIS 15.50.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010