Rubanenko Builds Up Debts of NIS 250M

Real estate and construction group Rubanenko has asked its creditor banks for a debt rescheduling arrangement after running up debts believed to be in the region of NIS 250 million.

Real estate and construction group Rubanenko has asked its creditor banks for a debt rescheduling arrangement after running up debts believed to be in the region of NIS 250 million.

The group is split into a publicly traded firm, Rubanenko (TASE:RBNK), which has debts of NIS 128 million, and a private firm, which carries out most of the group's construction work, and has unspecified debts, some to the banks and some to suppliers. The group claims its debt to suppliers is marginal.

The firm's owner and controlling shareholder, Shmuel Rubanenko, met yesterday with representatives of Bank Leumi, Bank Hapoalim, Mercantile Discount Bank, Bank Tefahot and Bank Adanim in order to negotiate an agreement in which the group would cash some of its assets and reschedule part of its debt. The publicly traded firm will today issue an announcement to the Stock Exchange.

Shmuel Rubanenko said yesterday that the recession and the slowdown in the construction sector have had a negative impact on the entire real estate sector, including Rubanenko. He said

Rubanenko was a strong and established company and that some of the group's assets would be sold in order to handle the situation in the best possible fashion without damaging the group's good name.

Rubanenko is one of the largest construction firms in the country and is currently building some 1,000 housing units, including a 450 unit project in Petah Tikva. The company is presently trying to sell a 500 dunam plot in Shoham for $20 million. Rubanenko also has holding companies in Eastern Europe and the United States.

The publicly traded firm ended the first half of 2002 with net profits of NIS 4.3 million on revenues of NIS 68.2 million and operating profits of NIS 6.5 million. However in 2001 the company registered a loss of NIS 9.6 million. In June the company had an equity deficit of NIS 2.3 million and cumulative debts of NIS 128 million, of which NIS 99.4 million were in short term debt.