Urbancorp Inc.’s Israel bondholders are seeking immediate repayment of 180 million shekels ($48 million) debt after the Canadian real estate developer filed for bankruptcy protection.
Holders of the company’s shekel-denominated bonds voted in favor of the action at a meeting in Tel Aviv and authorized an appointed officer of the court to start the process, taking other steps to protect their rights in consultation with Canadian lawyers, according to a filing to the Tel Aviv bourse. These may include the sale of assets collateralized to the benefit of bondholders, the break-up of the company and the arrangement of a debt settlement.
About four months after Urbancorp issued the 8.65 percent bonds on the Tel Aviv bourse, the Toronto townhouse developer filed for bankruptcy protection to reduce its debt with asset sales. Trading was suspended two weeks after the company failed to release its 2015 financial results on April 4, and this week its controlling holder and Chief Executive Officer Alan Saskin filed for personal bankruptcy protection.
Urbancorp’s distress has attracted the attention of Israel’s regulator. The “exceptional case” warrants examination and the Israel Securities Authority is “looking into the events,” a spokeswoman said by e-mail.
The developer built more than 5,500 units in Canada in the past 25 years.