Hershy Friedman takes over Azorim
The Canadian property developer will pay NIS 300 million for Boymelgreen Capital's 63.8% stake.
Canadian Jewish property developer Hershy Friedman has rescued Mizrahi Tefahot Bank (TASE:MZTF) from the Azorim Investment, Development and Construction Ltd. (TASE: AZRM) swamp. Friedman will buy Shaya Boymelgreen's 63.8% stake in the real estate company for NIS 300 million, which gives Azorim a valuation of NIS 470 million. Azorim's current market cap is NIS 517 million.
Friedman is to pay NIS 100 million cash immediately, and the remaining NIS 200 million at the closing in a few months' time. Former Sonol Israel Ltd CEO Tamir Poliker, who has advised Friedman in recent months on the Azorim deal, will become Azorim's CEO.
The controlling stake in Azorim was put up for sale by Boymelgreen Capital, which encountered financial difficulties. The sale was conducted by Mizrahi Tefahot Bank, to which Boymelgreen owes NIS 650 million. The debt originates from the 2006 deal in which Boymelgreen bought the stake in Azorim from IDB Holding Corp. Ltd. (TASE:IDBH) for NIS 1.2 billion, four times the current market value of the shares.
In the first nine months of 2010, Azorim made a loss of NIS 102 million, following a NIS 338 million loss in 2009. The company has total liabilities of NIS 3.6 billion, of which NIS 840 million are to bondholders.