Subscribe to Print Edition | Tue., December 02, 2008 Kislev 5, 5769 | | Israel Time: 02:41 (EST+7)   Back to Homepage web haaretz.com Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate GA 2008 Travel Week's End Anglo File

Going concern warning for Digal By Sharon Shpurer Digal Investments & Holdings' third quarter financial reports, published Sunday, include a going concern warning and a cautionary note that the company currently has no liquidity to meet the NIS 1.2 million interest payment due to its Series A bondholders today, or to repay the NIS 15 million principal due June 1, 2009. Digal, which is controlled by Yehuda Levy (38.2%) and Meir Shamir (34.6%), has yet to generate any revenue. The company ended the third quarter with NIS 4.9 million in losses, for a negative total of NIS 7.5 million since the beginning of the year. Advertisement One of the projects that has encumbered Digal is the Nof Zion Jerusalem apartment complex. The company received bank financing for the project in exchange for a lien on all its assets. So far this year, Digal has spent NIS 14 million on this project, and anticipates NIS 45 million in receipts from the sale of the apartments. Considering the global crisis, however, the financing bank is unlikely to allow Digal to use the sales proceeds to repay the bondholders. Digal's report also notes that as of September 30, it's in noncompliance with the terms of loans from one of the banks, but that bank has promised not to call the loan until October 1, 2009. Digal received short-term loans totaling NIS 128 million and owes convertible bondholders an additional NIS 45 million. Now the company is trying to sell some of its assets in order to meet it commitments, including selling the land at Nof Zion, its land inventory in Romania and other real estate in Israel. According to Funder.co.il, as of September 30, about 40 institutional investors owned Digal bonds, totaling NIS 9.6 million. Among the funds with sizeable Digal holdings were Psagot and Migdal, although their investments in Digal's convertible bonds could have changed by now. The yield on Digal convertible bonds has reached 173%, indicating that bondholders are doubtful they will see their money. Bookmark to del.icio.us   Boycotting Wagner The composer's works will remain a sensitive topic in Israel for many years. Bound for Gaza The Libyan ship is the most notable attempt yet to break the Gaza blockade.

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