Discount Mercantile Bank Seeks Asset Seizure Over Developer's Unpaid Loans on Southern Israel Land
Discount Mercantile Bank filed a request on Sunday to seize assets related to two plots owned by A.S. Yagel Entrepreneurship from Netivot, after the company failed to meet its loan obligations. The bank extended credit to the company for land purchases, with outstanding debt estimated at around 180 million shekels. A.S. Yagel, based in Netivot, holds additional lands intended for projects in Beit Shemesh, Nes Ziona, and Ramat Gan, and is owned by several firms including Ofek Sheli Construction and Development, owned by Raanan Halili, E.B.S.D Asset Management, and Ner Ledorot Holdings. Ofek Sheli is an active real estate company with multiple development projects.
The bank's seizure request focuses on two plots: one in Beersheba's Neighborhood D planned for 338 apartments, and another in Ramat Ramot slated for 316 apartments. The bank stated the company had long failed to meet its commitments, prompting it to enforce liens totaling about 180 million shekels. The bank emphasized it had shown considerable patience, granting the company a final chance to settle debts, which was not fulfilled.
For over a year, the developer breached the agreement. In May, the bank attempted another debt arrangement, involving Erezey HaNegev, owned by developer Oded Shariki, agreeing to buy the Ramat Ramot land for roughly 70 million shekels. However, the deal hinged on Israel Land Authority (ILA) approval to extend construction deadlines, which was not granted, leading to cancellation of the sale and the debt arrangement.
Due to the complexity of selling land tied to ILA development agreements, the bank now must sell the plots itself. The bank acknowledged contractual and practical challenges related to construction timelines, plot subdivision, payments, and potential breaches under the ILA agreements.
Regarding the Beersheba plot, the bank provided about 54 million shekels in May 2021 for its purchase from Neve Or, secured by a lien. Current credit for this project stands at approximately 63 million shekels. The plot was sold in 2022 to A.H. Menivim for 135 million shekels, but only about 30 million shekels have been received so far, with the remainder contingent on zoning plan approval.
For the Ramat Ramot project, the bank extended about 85 million shekels in 2022 after the company won an ILA tender, later increasing credit to around 100 million shekels to help repay existing loans. These amounts exclude interest and additional charges. The bank also claims the company sought to cancel the lease contract with the ILA without informing the bank while negotiating a debt settlement behind its back.
