W-Box Real Estate Faces Project Cancellation After Ownership Change
Translated & summarized from Calcalist by baba
W-Box Real Estate faces a potential cancellation of a major NIS 383 million project in Tel Aviv's Florentin neighborhood just days after a controlling stake was sold. Landowners are seeking to annul the agreement, citing fundamental breaches including the sale of control without consent. W-Box disputes the claims and believes the cancellation is unlikely to be upheld. The company's stock has declined significantly in the past year.
The story in 6 lines · by baba
- W-Box Real Estate faces cancellation of a NIS 383 million project after a recent ownership change.
- Landowners claim fundamental breaches, including the sale of controlling shares without consent.
- Landowners are seeking to annul the agreement and offset NIS 30 million in damages.
- The project involves building 199 apartments and commercial spaces on a 3-dunam plot.
- W-Box invested NIS 49 million and expects NIS 383 million in revenue from the project.
- A 25.4% stake in W-Box was recently sold to Tamir Cohen and Tzachi Abu.
Just four days after the completion of its share sale, W-Box Real Estate is confronting the potential cancellation of one of its major projects. The landowners of the Gvulot complex in Tel Aviv's Florentin neighborhood have notified the company and its subsidiary of their intent to annul the agreement. They also plan to offset sums due to W-Box, including a NIS 30 million liquidated damages clause, expenses, and financing costs.
The landowners claim the agreement was fundamentally breached by W-Box, citing the controlling shareholder's deal to sell his stake without their consent. This notice follows a lawsuit filed by the landowners in August, seeking interim relief from the Tel Aviv District Court regarding the project. They had previously requested the lawsuit's dismissal due to an alleged waiver of the deal.
W-Box stated it is reviewing the allegations but believes the landowners' demand for cancellation and offsets is unlikely to stand. The company views this as a demand rather than an approved offset or payment. The project, described as "very significant" by W-Box, involves a 3-dunam plot where the company planned to build 199 apartments and commercial spaces.
Under the agreement, W-Box's subsidiary would acquire full land ownership, with landowners entitled to 54% of project revenues plus VAT, and advance payments up to NIS 140 million plus VAT. W-Box had invested NIS 49 million by early 2025, with projected revenues of NIS 383 million.
Last Wednesday, Tamir Cohen (5.4%) and Tzachi Abu's Gefen Entrepreneurship (20%) acquired a 25.4% stake in W-Box. Cohen paid NIS 16 million and Abu paid nearly NIS 60 million, valuing the company at NIS 304 million. W-Box's stock has fallen 34% in the past year, underperforming the TA Construction index's 9.4% decline, with the company currently valued at NIS 284 million.
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