Delek RE set to lose its U.K. parking lots to lenders
The firm's efforts to strike a deal with its banks reached a dead end, apparently meaning its major British asset will be lost.
Debt-ridden Delek Real Estate is poised to lose a key asset, its Linchfield parking facilities in Britain, to its lenders. Linchfield has 127 parking sites across the U.K.
Yitzhak Tshuva's Delek Real Estate and its partners in Linchfield have been unable to reach an agreement with their lending consortium, which includes RBS, Lloyds Bank and private equity giant Blackstone. The consortium is owed about 567 million pounds, or around NIS 3.5 billion.
Delek Real Estate and its partners were asked to inject tens of millions of pounds to keep the assets, even though the book value was virtually nothing.
On Thursday, talks between CEO Eran Mital and Delek Real Estate's banks failed to produce an agreement.
The banks demanded an immediate injection of 40 million to 45 million pounds.
Because the amount owed is more than the value of the underlying assets, Delek Real Estate sought an agreement under which the banks would take 20 million pounds now and allow the company to negotiate a separate understanding with Blackstone. But the banks refused.
A foreclosure would come a few weeks after the lending consortium valued Linchfield's assets at just 497 million to 540 million pounds, below the 567 million pounds owed.