Israeli Entrepreneur Exits Tel Aviv Stock Market After 8 Months

Israeli entrepreneur Amir Shiriqi is prematurely repaying NIS 292 million in bonds issued by his company, Aya New York, on the Tel Aviv Stock Exchange, just eight months after the listing. The decision follows a dispute with bondholders, who were represented by lawyers Guy Gissin and Yael Hershkovitz. The conflict arose after the company's second-quarter financial reports revealed that subsidiaries, whose assets are pledged to bondholders, had entered into agreements to pledge future revenues to other entities. Shiriqi claimed he was unaware of these deals and that they were corrected, but bondholders representing 45% of the debt appointed the lawyers to represent them, alleging breaches of contract.

Shiriqi stated in an interview that he met with major bondholders, including Yelin Lapidot and Meitav, along with the bond trustee, and decided on a full early repayment at par value, despite the bonds trading at 86% of face value. The bonds are secured by two of Aya's Manhattan properties, valued at $137 million, out of a total of five properties in the city. Shiriqi, who founded Aya in 2007, described his business model of acquiring, improving, and re-renting properties, eventually moving to purchasing assets and building a portfolio.

He explained that the decision to list in Tel Aviv was strategic, aiming to use the cheaper financing for distressed property acquisitions. However, he noted a shift in market sentiment against US-based BVI (British Virgin Islands) companies following scandals involving other firms, leading him to believe that such companies would struggle to raise capital in Israel for the next two years. Shiriqi expressed understanding for the market's caution due to past fraud but felt there was a form of “racism” against BVI companies.

Shiriqi secured the repayment funds from US financial institutions, with a large international bank providing $100 million at an interest rate below 7.7%. He contrasted this with the “headache and drama” of dealing with bondholders in Israel, emphasizing his desire to exit with a good reputation by offering full repayment without haircuts. He acknowledged a minor issue with an additional lien on $3.3 million, which he attributed to a misunderstanding and was corrected within 48 hours, but felt bondholders used it to generate negative publicity. He also mentioned an ongoing legal dispute with the underwriter, Live Base, over commission fees.