Israel Matzav

Tuesday, March 01, 2011

Bank Leumi to be boycotted?

Bank Leumi may yet find itself the subject of a boycott by the religious Zionist community, after it turned down an offer by supermarket magnate Rami Levy to buy the interest of a bankrupt developer in a Jerusalem housing project. The project is only one third complete, and Bank Leumi's action may put two thirds of the project in the hands of a 'Palestinian' businessman. The other third of the project has been sold to religious Jews.

In light of the Bank Leumi rejection, Palestinian Authority semi-resident Bashir Al-Masri, represented by the same lawyer who advised Ariel Sharon during the Disengagement, Dov Weisglass, has redoubled his efforts to buy the lands of Nof Tzion.

Located to the east of Talpiyot and south of the Old City, the neighborhood was originally planned as a luxury project for wealthy apartment-seekers from abroad. When this did not pan out, the project was saved by the religious-Zionist public, for which its strategic spot, in terms of both Jewish-Arab demographics and a panoramic view of the Temple Mount and the Old City, increased its attractiveness. Thus, a new religious-Zionist neighborhood arose in eastern Jerusalem.

The first phase of the project was completed several years ago, and much has been written about the 90 families' satisfaction with their new neighbors and surroundings. However, they are now greatly apprehensive that if the project falls into Arab hands, the 180 planned units of Stages II and III of the project will not only not be built, but also that their own homes will become an unsafe and unviable Jewish enclave surrounded by Arab homes.

They have therefore threatened to take Bank Leumi – the guarantor of the project – and the Digal development company to court for backing down on their much-touted plans to ensure that the project is for the national-religious public.

Bank Leumi has rejected Levy’s offer, saying that it prefers to break up Digal altogether and sell its assets – including the land of Nof Tzion – to the highest bidder. This once again leaves the field open to Al-Masri. Al-Masri has also taken another step, seeking to buy out the shares of Digal.

A letter of intent to boycott Bank Leumi has already been signed by top rabbis in the religious-Zionist camp.

If Bank Leumi is boycotted over this project, it could find itself boycotted in the US as well.

I have previously written about the Nof Zion project here.

Labels: Arab boycott of Israel, Bank Leumi, Bashir al-Masri, Digal Investment and Holdings, Dov Weisglass, Mivtach Shamir, Nof, Rami Levy, Techsal Trading Ltd.

Thursday, December 09, 2010

'Palestinian'-American businessman buys company developing 400-unit housing project in 'east' Jersualem

Control of Digal Investments, a Tel Aviv Stock Exchange-listed company that is promoting a luxurious, private Jewish neighborhood that is under construction next to the Arab neighborhood of Jebel Mukkabar in 'east' Jerusalem, has been sold to a 'Palestinian'-American businessman.

Digal Investment and Holdings Ltd. (TASE: DIGL) bondholders yesterday accepted an offer from a businessman represented by Adv. Dov Weissglass as the basis for a debt settlement by the company. Weissglass was the director of the Prime Minister's Bureau for Ariel Sharon and also served as chairman of Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ).

Sources inform ''Globes'' that Weissglass is representing a Palestinian businessman who holds a US passport and who is behind Cypriot company Techsal Trading Ltd. The offer chosen by Digal's bondholder includes a NIS 36 million cash payment at NIS 0.60 per NIS 1 nominal value bond. The buyer plans to convert the bonds into shares and delist Digal from the TASE.

Digal is financially troubled and its market cap is just NIS 5.2 million. The company's flagship project is the 395-unit Nof Zion project under construction near the Armon Hanatziv promenade in eastern Jerusalem.

Digal, which has a shareholders' equity deficit of NIS 18 million, did not make a NIS 30 million payment to the bondholders. The company's total bond debt is NIS 60 million, and it owes Bank Leumi (TASE: LUMI) NIS 84 million.

Digal posted NIS 7 million revenue in the first half of 2010. Its loss rose to NIS 12 million in the first half after it lost NIS 17 million in 2009 as a whole. The company's auditors appended a going concern warning to the company's financial reports.

Digal is controlled by Meir Shamir through Mivtach Shamir Holdings Ltd. (TASE:MISH), with a 34.6% stake, and Yehuda Levy, with a 38.2% stake. Meir Shamir announced in August that he would transfer Mivtach Shamir's entire holding in Digal to its bondholders. The transfer has not yet taken place.

Digal's share price rose 5.5% in morning trading to NIS 0.73.

Nof Zion is a Jewish project. Much of it has been sold already and many people have moved in. There have been stories in the local media from time to time with complaints about unfulfilled promises. Many of the buyers are American investors, and some may not have known that they were buying so close to an Arab neighborhood. Hmmm.

Labels: Digal Investment and Holdings, Dov Weisglass, Mivtach Shamir, Nof, Techsal Trading Ltd.