Simad Holdings May Sell Summer Camps Above Book Value, Boosting Institutional Bondholders’ Prospects

Simad Holdings, which recently collapsed after raising 620 million shekels in bonds primarily purchased by Israeli institutional investors, has reported a potentially positive development for these bondholders. The company disclosed results from an internal auction process led by its recently appointed Chief Restructuring Officer, Asaf Ravid, alongside U.S. investment bankers and lawyers. This process involved multiple rounds of bids for 22 summer camps managed by Simad on the U.S. East Coast, mostly serving Jewish youth.

The total proceeds from the sale of these camps reached approximately 368 million dollars, exceeding their book value of 345 million dollars as of the end of last year. Crucially, the camps pledged as collateral for the Series A bonds are valued at about 312.3 million dollars, compared to a book value of 275.1 million dollars. Including the private sale of Camp Achim (around 7 million dollars) and the expected sale of Camp Chen-a-Wanda (approximately 17 million dollars) by the end of September, the total attributed proceeds to secured creditors amount to about 336.3 million dollars. This represents a premium of roughly 13 percent over their book value, or about one billion shekels at current exchange rates.

This development significantly improves the likelihood that Simad will fully repay the 620 million shekel bond issuance from last winter. Despite the company’s rapid collapse in May due to alleged misappropriation of tens of millions of dollars by its owners, the Shabsales brothers, bondholders may recover not only their principal but also accrued interest. Trading in Simad’s bonds was halted shortly after the collapse, with prices plummeting to 29 agorot, reflecting a junk yield of 56 percent and a market value of 179 million shekels, down 441 million shekels from issuance.

While this auction outcome offers hope for institutional investors, including 246 mutual funds holding about two-thirds of the bonds valued at 400 million shekels before the collapse, risks remain. The bankruptcy case is managed under U.S. Chapter 11, where other creditors may claim against the assets. Net proceeds will be reduced by transaction costs, and the court will determine the final distribution to creditors. Simad also secured a DIP loan of up to 220 million dollars in June, with 80 million dollars disbursed in cash, including a senior lender position held by Clearmark with about 60 million dollars at double-digit interest.

A court hearing in New Jersey is scheduled for August 10, with the camp sales expected to close by September, subject to court approval and binding agreements. Multiple bids were received for most assets, allowing the company to seek court approval for alternative offers if necessary.