Further to immediate reports of Koor Industries Ltd. ("the Company") dated 4 October and 22 November, 2009 (refs. 2009-01-247001and2009-01-290715), concerning an agreement to purchase the HSBC headquarters building on Fifth Avenue in New York, which consists of two buildings known as 452 Fifth Avenue, NY and West 39th Street, NY, which have 12 and 29 storeys respectively and a total built-up area of approximately 80,000 sq.m. ("the Property"), by the Company and Properties & Construction Ltd. ("Properties & Construction") (a company controlled by Discount Investments Ltd., the controlling shareholder in the Company), through a jointly-owned company ("the Buyer Corporation), the Company hereby gives notice that on 26 February, 2010, the Company and Properties & Construction, through the Buyer Corporation, signed documents in connection with financing the purchase of the Property, as follows:
1. A non-binding term sheet with Bank Leumi USA ("Leumi USA") and Bank Leumi le'Israel Ltd. ("Leumi Israel"), whereby Leumi USA will extend a loan of approximately USD 210 million to the Buyer Corporation for a period of 10 years. The Company expects that a binding loan agreement will be signed within a few weeks.
To secure the loan, the Buyer Corporation will encumber the Property and provide additional collateral in the accepted manner, and the Company and Properties & Construction will each provide a guarantee, separately and not jointly, for USD 52.5 million in favour of Leumi USA and a guarantee unlimited in amount, to secure special instances as is customary with loans of this kind.
2. To assure a fixed interest rate for the first four years of the term of the loan, the Company acted to fix the interest by taking short-term credit from Leumi Israel for the period until the loan is made available by Leumi USA, against a deposit and its encumbrance in favour of Leumi Israel.
The closing of the transaction or purchase of the Property is expected to be in mid-April 2010. |
