Big Group Seeks Court Approval for $260 Million US Asset Dividend
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Israeli real estate firm Big Group is asking a court to approve a $260 million dividend distribution from its U.S. operations. The funds come from the sale of nearly all its American assets, which began in 2010. The distribution will be split between Big Group and Migdal Insurance, with $120 million in cash and $140 million in debt repayment. The company is seeking court approval despite the subsidiaries having accumulated losses.
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- Big Group seeks court approval for a $260 million dividend from U.S. asset sales.
- The distribution involves $120 million in cash and $140 million in debt repayment.
- Big Group holds 80% of the U.S. subsidiary, Migdal Insurance holds 20%.
- The company is exiting the U.S. market after operating there since 2010.
- Subsidiaries do not meet profit tests due to accumulated losses.
- Most U.S. assets were sold between 2021 and 2022 for $568 million.
Israeli real estate company Big Group is seeking court approval to distribute $260 million in profits from the sale of its U.S. assets. The company's U.S. subsidiary, Big USA, has filed a request with the Tel Aviv District Court to proceed with the distribution to its shareholders: Big Group, which holds 80%, and Migdal Insurance, holding the remaining 20%. Big Group entered the U.S. market in 2010 in partnership with Migdal through Big USA, which operated Big North America. The dividend distribution will occur in two stages. First, Big North America will transfer assets from its subsidiary Big Inc. to Big USA. Subsequently, Big USA will distribute the proceeds to Big Group and Migdal according to their ownership stakes.
The total $260 million distribution includes $120 million in cash and a $140 million debt repayment right from Big Inc. to Big USA for loans previously provided. Migdal Insurance is set to receive $24 million in cash and a $28 million debt repayment right, effectively becoming a creditor to Big Group for that amount. Big Group will receive $96 million in cash and a $112 million debt forgiveness, canceling that portion of the debt.
While both Big North America and Big USA meet solvency tests, demonstrating they can meet their debts and possess substantial equity, they do not meet profit tests due to accumulated losses. Big North America has a deficit of approximately NIS 15,000, and Big USA has a deficit of about NIS 2 million. Big Group began its U.S. operations in 2010, managing and leasing shopping centers, primarily open-air malls. Weaknesses in the U.S. retail sector, exacerbated by the pandemic and the rise of e-commerce, led Big Group to decide in November 2020 to exit the market and liquidate its assets. Most assets were sold in 2021 and 2022 for a total of $568 million. Further sales in 2023 and 2024 yielded an additional $32 million and $114 million, respectively. In July, another property was sold for $82 million, leaving one remaining mall in Pennsylvania slated for sale.