Real estate developer Habas HZ Investments Ltd. (TASE: HABS) today officially asked its bondholders for a debt settlement. In a statement, thec company asked for "a rescheduling of part of the bond payments in exchange for reasonable compensation."
Habas CEO Hertzel Habas told the bondholders, "Sarcasm won't help, and gives me no dignity. Let's do everything to return your money to you. An atom bomb fell on us. I have nothing to finance this." He mentioned not a word about his personal fortune and properties, or the amount of capital he was prepared to offer the company's creditors.
Habas added, "We never thought there would be such a crash, and we were not prepared with loans. We will do everything. Regrettably, we have fallen to the point of sending out an SOS. Shachar's loan does not fit in with our normal business procedures."
Habas was referring to a €1.3 million loan obtained from Mayer Cars and Trucks Ltd. unit Mayer (Kesher) Real Estate Ltd.,
Hertzel Habas owns 40% of Habas, Israel Corporation (TASE: ILCO) controlling shareholders Idan Ofer and Udi Angel own 23%.
Habas asked the investors to take the long view, and said that financially troubled Dutch REIT Nieuwe Steen Investments NV (NSI) (AEX:NISTI), in which Habas owns a large stake, was not realistically priced. "The plunge in the share price undermined our collateral. There is no wonder that the share price has fallen in view of the reports. Every drop of ten cents requires an additional deposit of €700,000. There is a €70 million shortfall," he said.
Habas's share price fell another 17% today to NIS 1.00, giving a market cap of NIS 40 million.
Habas's investment in NSI has brought Habas to its current state. NSI's share price has fallen 75% since the investment, and Habas's greatest threat comes from foreign secured creditors which are liable to foreclose its main lien - NSI shares - over a €55 million debt. If the foreign banks foreclose on the NSI shares, Habas's Israeli creditors, including the company's bondholders which are owed NIS 450 million, will be left with very little.
Published by Globes [online], Israel business news - www.globes-online.com - on March 18, 2013
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