Electra Real Estate Ltd. gained the most in almost a month after a unit sold a Chicago building for $94 million as the Israeli property investor seeks to boost cash flow as it struggles to pay back debt.
Shares of the Tel Aviv-based company jumped as much as 7.9 percent and traded 3.5 percent higher, the most since Dec. 3, to 7.861 shekels at the close in Tel Aviv. The shares are down 5.5 percent in 2012. The yield on the company’s 5.2 percent bonds due January 2016 fell 48 basis points to 13.44 percent, the lowest since Dec. 20.
“This is part of a series of steps we are taking to increase liquidity, improve our financial situation, and implement our business strategy to narrow our geographic focus,” Chief Executive Officer Shai Weinberg said in the e-mailed statement. He was not immediately available to respond to a Bloomberg request for further comment.
The property’s sale by a unit, held 60 percent by Electra, will add 79 million shekels ($21 million) of cash flow to the company, according to an e-mailed statement. The company, which in Dec. 2011 had its rating lowered to ‘ilBBB+’ from ‘ilA-’ at Standard & Poor’s Maalot, has sold properties valued at more than 1 billion shekels this year and boosted cash flow by 230 million shekels, according to Electra.
Electra Real Estate, 58 percent held by Elco Holdings Ltd., holds a portfolio of about 50 properties including parking garages from Israel to Switzerland. The company this year reached an agreement with three Israeli banks to extend a deadline on 516 million shekels in debt until 2016, it said.