Property and Building Corp. Ltd. (TASE:PTBL) is acting to obtain a NIS 700 million loan to finance the purchase of Aaron Frenkel’s shares in income producing real estate company Bayside Land Corp. Ltd. (Gav Yam) (TASE:BYSD1), which Property & Building controls. This follows the cancellation of the deal whereby Property & Building was to have sold the HSBC Tower in Manhattan. Property and Building signed an agreement last December to buy Frenkel’s 37.2% stake in Bayside for NIS 3.1 billion.
Aaron Frenkel sells Bayside stake to Property & Building
Property & Building sells HSBC Tower in Manhattan
In the past few weeks, Property & Building’s share price has fallen 35% as the difficulties over the HSBC Tower sale emerged. It has a current market cap of NIS 2.2 billion.
The $855 million sale, to Innovo Property Group, was due to be completed yesterday. Under the sale agreement, Property & Building will retain the $35 million deposit paid by the buyer. The sale was due to yield flow to Property & Building of NIS 1.1 billion.
The reason that Innovo Property Group was unable to complete the deal was that it emerged that the main tenant, HSBC, which leased 63% of the building, would not renew its lease.
Property & Building is the main income producing real estate arm of Discount Investment, whose main shareholders are Mega Or, controlled by Tzahi Nahmias, the Salkind family’s Elco Holdings, and Rami Levy.
Published by Globes, Israel business news – en.globes.co.il – on May 17, 2022.
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