The ink is barely dry on last month's agreement for Canada's Hershy Friedman to acquire the controlling interest in Azorim Investment, Development and Construction Ltd. (TASE: AZRM) from Shaya Boymelgreen, and the new owners has been hit with bad news. The company will report a NIS 65 million write-down on land it owns in Houston.
Azorim bought the 5.5-acre lot in 2006. The company has been planning to build a 240-unit luxury residential project on the site at a cost of $240 million, and has already spent $39 million. The company has now decided not to begin building. CB Richard Ellis Group Inc. (NYSE: CBG) valued the land at just $19.4 million.
Azorim will also have to revise its financial reports for 2008 and 2009, adding losses of NIS 3 million and NIS 10 million respectively, due to accounting errors on marketing and overhead costs.
Friedman bought the 64% controlling interest in Azorim for NIS 300 million, reflecting a company value of NIS 470 million. The proceeds will go to Azorim's largest creditor, Mizrahi Tefahot Bank (TASE:MZTF). The company's market cap is NIS 478 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 31, 2011
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