Disgruntled homebuyers said yesterday they plan to launch bankruptcy proceedings against housing company Heftsiba amid rumors the firm has gone under. Associates of the Yona family, which owns Heftsiba, said the company is negotiating with lawyers to enter bankruptcy proceedings. But there is no sign yet of progress in these talks.

A source close to the family said the company denies estimates in the press that its debts to contractors and suppliers near a billion shekels. Still, Heftsiba appears to be in much more dire straits than it has admitted.

The disgruntled buyers have purchased homes in the Har Homa neighborhood in Jerusalem. They plan to petition the Jerusalem District Court to put the company into receivership and appoint a temporary receiver. They say the company is a year late in delivering their homes and that they haven't received bank guarantees for payments made, as required by law.

The buyers assert that reports of invasions of homes being prepared in other towns (See news story, Page 1) generate fears suppliers will enter the homes to remove the goods they installed. The buyers say there is a genuine concern for their properties, so they want a temporary receiver to prevent unilateral steps by creditors.

One homebuyer told how a month and a half ago he had "signed a letter of intent to buy an apartment in the Heftsiba project in Efrat in Gush Etzion and also paid an advance. Until today we didn't sign a purchase contract because the company didn't manage to produce bank guarantees." He added: "Others signed letters of intent much earlier than us, and they also got stuck with the same problem. In practice, the marketing of the project has ceased."

Real estate executives claim that Heftsiba's troubles come as no surprise. Such rumors have abounded in the past year from several sources. The company even threatened to sue some reporters who raised the issue. Several elements that characterized the company's operations shed light on possible explanations for the problems.

Low demand

One reason is the company's focus on projects in outlying regions, where housing prices have fallen in recent years along with demand, while prices in the center of the country continue to climb. The firm has over 20 projects across the country, but most of them are not in low-demand areas, including Ma'aleh Adumim, Elad, Be'er Sheva, Carmiel, Moshav Matzliach and Efrat. Some projects are near each other, such as in East Netanya, Kfar Yona, and West Hadera, causing internal competition.

The $150 million Hadera project raises a bigger question mark. Begun in 2004, Heftsiba bought out its partner Solel Boneh as it saw prices in coastal neighborhoods rising and expected the same for Hadera. But things haven't turned out that way, and there are conflicting stories about the project's success.

Sharon Shpurer adds: Amid concerns over Heftsiba's financial state, Electra decided Wednesday to begin legal proceedings to back out of a deal it had signed to buy the construction company. Electra had already paid NIS 30 million last week for Heftsiba. Industry sources estimate its debts top a billion shekels, including NIS 400 million in bonds and NIS 450 million to the banks.