Delek owner Yitzhak Tshuva
Photo: Gil Yohanan
Delek Real Estate's bond rating dropped
Maalot rating firm says company going to a debt arrangement. 'To our understanding, it is not expected to pay interest and principle on any other bond series'
After Delek Real Estate failed to pay its bondholders the interest on the 5-Series bond which was due Sunday, the Maalot rating firm decided to downgrade the company's credit rating to D, which in effect deems the company insolvent.
"In light of the company's imminent debt arrangement, as well as our understanding that it is not expected to pay principle and interest expenses for its other bond series, the issuer's rating and the rest of the bond series were downgraded from CC to D," wrote the rating firm's analysts.
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Last Wednesday, the company published its results for the second quarter of 2011. Losses attributed to the company's shareholders amounted to some NIS 394 million (about $110 million) as compared with about NIS 234 million ($65 million) in the same quarter last year.
The company accountants warned that there were doubts concerning the company's ability to continue existing as a going concern in light of the NIS 360 million ($100 million) loss suffered by its shareholders; since the company has a NIS 1.6 billion ($440 million) capital deficit (without assets and liabilities attributed to the company's holdings for sale) and a NIS 1.16 billion ($320 million) working capital deficiency; and due to the uncertainly that shrouds the company's arrangement with bondholders and its ability to meet its financial obligations on schedule.
Delek Real Estate will hold a bondholders meeting for the 5-series bondholders on September 7 to determine the company's ability to summarily repay the debt.
Click here to read this report in Hebrew
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