This isn't good news for the Be'eri Nehardea Tower
http://www.globes.co.il/serveen/
NIS 50m loss, going concern warning for Beeri Towers
A. Arenson, the installation contractor, has discontinued work on the project, and sales have been halted.
Shai Shalev 12 Apr 05 17:07
The financial statements of Beeri-King Shlomo Towers Ltd., which initiated the Be'eri Nehardea project, report that the company’s loss in the fourth quarter of 2004 equaled its loss in the first nine months of the year NIS 50 million. The company lost NIS 3.7 million in 2003. The company lost money on both Be'eri Nehardea and its share in a project under construction in Warsaw, Poland.
Sources inform "Globes" that sales of apartments in Be'eri Nehardea have been halted, following the deterioration in the company’s business. BeeriKing Shlomo had only NIS 4.8 million in revenue in 2004, and a NIS 6 million negative cash flow from current activities. The company’s heavy 2004 loss increased its equity deficit to NIS 72 million.
BeeriKing Shlomo’s auditors, Zohar and Zohar and Co., wrote that the company’s activity depends on a resumption of construction, after installation contractor A. Arenson Ltd. halted work, and on continued financial coverage by Bank Hapoalim (LSE: BKHD; TASE: POLI) for the project. Bank Hapoalim has already lent NIS 250 million for the project.
Until construction is resumed, and further financial coverage obtained, the auditors say that significant doubts exist regarding the company’s ability to continue as a going concern. BeeriKing Shlomo is negotiating with contractors to resume construction on the project, and with Bank Hapoalim for the second stage of financial coverage.
A. Arenson, which discontinued construction of the project in November, owned 20% of BeeriKing Shlomo until recently. The shares were sold to Stooga International, owned by Canadian investors. Hersh Friedman heads the group.
In February, A. Arenson filed a court petition against the remaining shareholders in the project, Stooga (60%) and Dirom Construction Company (DROM) (40%), for the appointment of an arbitrator. He alleged that Stooga and Dirom had violated a commitment to allocate $1.4 million from the proceeds of the deal between them to repay a loan from Israel Discount Bank (TASE: DSCT), for which Arenson was also responsible. Adv. Ram Caspi was appointed as arbitrator.
Published by Globes [online] -
www.globes.co.il - on April 12, 2005