Israeli Real Estate Developer Exits Local Debt Market
Translated & summarized from Ice by baba
The story in 5 lines · by baba
- Aya New York is exiting Israel's debt market after raising NIS 292 million.
- Controlling shareholder Amir Shariki cited suspicion towards U.S.-based firms.
- The company is seeking $104 million in U.S. bank financing for repayment.
- A dispute over collateral pledges has been addressed, with most removed.
- The firm owns five income-generating properties in Manhattan.
Amir Shariki, the controlling shareholder of Aya New York, is seeking to end the company's activity in the Israeli debt market, just eight months after it raised approximately NIS 292 million through bonds on the Tel Aviv Stock Exchange. In an interview published Sunday, Shariki expressed frustration with the treatment of real estate companies operating in the U.S. and incorporated in the British Virgin Islands, stating that suspicion towards these firms will hinder their ability to raise capital in Israel over the next two years. He revealed that his wife had warned him against entering the Israeli capital market before the bond issuance, saying he would be "eaten alive," a warning he now believes was correct.
The decision also comes amid a dispute regarding the company's conduct. Second-quarter reports revealed that subsidiary companies entered into agreements to pledge future receivables, even though their assets were already serving as collateral for bondholders. The company claimed it discovered the issue during the preparation of the reports and has since taken steps to rectify it. An update on October 1st stated that the registered pledges had been removed, with one exception that the company expects to be removed soon.
Investors are primarily concerned with how and when their money will be repaid. Aya New York is pursuing $104 million in U.S. bank financing to fully repay the bonds, including accrued interest. The proposed plan suggests repayment within 45 days of bondholder approval, with a possible 30-day extension under certain conditions. However, the company cautioned that there is no certainty the financing will be secured or that the trust deed amendment will be approved.
Aya New York operates in the residential and hotel real estate sector in Manhattan, owning three residential properties and two hotels. The company aims to replace its Israeli public debt with American bank financing and continue its focus on acquiring, improving, and managing properties in New York.
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