Melisron to buy control of British Israel
British Israel, controlled by Leo Noe and Pujo Zabludowicz, traded at a value of NIS 1.8 billion. Liora Ofer's Melisron says it is in talks to acquire company, but fails to elaborate on terms of transaction
Since the news broke, the trading of British Israel and Melisron stocks has been stopped. Melisron issued a statement confirming the Calcalist report on the talks, but failed to provide any additional details.
British Israel manages and rents malls, commercial centers, industrial and office buildings, and is controlled by Leo Noe (55.8%). Pujo Zabludowicz, also a partner in the company (15.6%), joined after the company merged with Tamares Real Estate.
The company is traded at a value of NIS 1.8 billion (about $477 million). Calcalist has also learned that Melisron will purchase Zabludowicz's shares, in addition to those of Noe.
British Israel said it would provide additional updates throughout the day. The company's report to the stock market said the company's main shareholders were in talks to sell control of the company and that an announcement on the matter was expected soon.
High expenditures
According to Melisron's second quarter report, high financing expenditures and negative real estate revaluation reduced the company's profits to only NIS 1 million ($265,000), compared to a profit of NIS 28 million ($7.42 million) during the equivalent period last year. The company reported stability in rental prices and proceeds from stores in its malls.What aggravated the company's outcome above all else were the financing expenditures, which stood at NIS 48 million ($12.7 million) during the second quarter, as compared to NIS 22 million ($5.8 million) during the equivalent period last year.
Financing expenditures ballooned during the second quarter of this year mainly due to the company raising debts to purchase malls, and also due to the rise in the consumer price index, to which its bonds are linked, which lead to an NIS 22 million ($5.8 million) increase in its financing expenditures, as compared to NIS 13 million ($3.5 million) during the second quarter of 2009.
The company also saw a NIS 25 million ($6.6 million) decrease in the net value of its assets due to a slight drop in rental prices in malls in periphery towns.
Melisron has a NIS 132 million ($35 million) working capital deficit. According to the company, it will withstand its obligations. The company noted that if necessary it can raise funds to cover its working capital deficit, either by utilizing its credit frameworks or by raising new debts and collateralizing its assets.
British Israel marked a 15% increase in its net operating income (NOI) during the second quarter, which rose to NIS 133 million ($35 million). The company enjoyed a shareholder value of NIS 65.8 million ($17.4 million), as compared to NIS 138.3 million ($36.6 million) during the equivalent period last year.
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