Pangaea is conducting due diligence, Sha'ashua still in the race.
The race for control of Azorim Investment, Development & Construction is heating up. The latest investor to throw his hat into the ring is parking lot tycoon Tsahi Merkur, owner of Success Parking, which operates close to 100 parking lots in Israel and has estimated turnover of NIS 200 million annually.
In a deal shaping up with Mizrahi Tefahot Bank, Merkur could land a loan for NIS 190 million, say market sources, half the amount needed to buy a 51% stake in Azorim, which is currently controlled by the troubled Boymelgreen Capital group. The financing would come as an eight-year balloon loan, with interest payments due regularly and the entire principal due at maturity in one balloon payment.
Over the last month several parties have been reported to be in advanced talks to purchase the construction firm. Just last week Pangaea Real Estate, controlled by Barak Rosen and Asaf Tuchmair, announced it has begun performing feasibility studies for buying the company.
Previously, Boymelgreen Capital had announced it was negotiating with businessman Yakir Sha'ashua. Mizrahi Tefahot, however, expressed doubt as to whether Sha'ashua could provide enough liquid capital to close the deal, and announced it was holding parallel talks with several American and German investor groups.
Bank Mizrahi Tefahot, as the main creditor of Shaya Boymelgreen's Boymelgreen Holdings, has the most at stake.
The bank provided Boymelgreen with most of the financing for his NIS 1.2 billion purchase of control in Azorim from Nochi Dankner's IDB group in 2006. Since then Mizrahi Tefahot has been left holding the proverbial bag. The security for its loan rests on the dwindling value of Boymelgreen's shares in Azorim, currently estimated at NIS 400 million.
Azorim's capital equity has plummeted from NIS 1.3 billion to NIS 200 million over this period, and the company has developed acute liquidity problems. An indication of this was its failure several months ago to issue NIS 200 million in convertible bonds. Over the past two and a half years, with financing costs surpassing NIS 300 million and administrative and general expenses of more than NIS 150 million, the company lost its shareholders a total of more than NIS 800 million.
Once burned twice shy, Mizrahi Tefahot doesn't seem in a big hurry to decide who the next owners will be. As of now it appears that more than 10 potential investors have expressed interest in Azorim. The bank is going over all offers with a fine toothed comb, with an eye to find a buyer this time around with other substantial business investments in Israel.
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