Auditor Slaps First Ever Going-concern Warning on Habas

Builder owed bondholders NIS 415 million, and had NIS 13 million cash and year-end 2012.

The Habas housing construction firm was slapped with its first-ever going-concern warning, in its financial statement for 2012.

The builder had reported heavy losses for 2012 of NIS 270 million, note its auditors, KPMG Somekh-Chaikin. Among other things Habas wrote down its 20.5% stake in a Dutch REIT by NIS 110 million.

The significance of a going-concern warning is that the auditors are dubious Habas can meet its liabilities. The company's shareholder equity shrank to NIS 132 million in 2012, from NIS 414 million in 2011, as a result of the losses.

Also, the Habas Group owes bondholders NIS 415 million, while its cash on hand at the end of 2012 totaled NIS 13 million.

Under the circumstances, the company began negotiating with its creditors some three weeks ago.

The main problem stems from its holding in Dutch real estate investment trust NSI, which it holds through its subsidiary Habas Star. Habas wrote down its valuation for its NSI stake, which is traded on the Euronext exchange, because of a gap of over NIS 400 million between its book value and its market value. That gap has continued to widen.

The value of the holding as of the third quarter stood at 159 million euros. The revaluation was set at 137 million euros, based on capital investments, but the post-reduction gap with the REIT's market value remained significant, around 67 million euros.

Ofer Vaknin
Tomer Appelbaum