Gmul Investments writes off NIS 27 million on Nitsba loan

Balance on the loan now comes to NIS 164 million, but Gmul is limiting write off for the time being
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Gmul Investments, in which the Trump family (not related to Donald Trump) bought a 67% controlling stake for NIS 380 million, is reporting a NIS 27 million write off due to its investment in real-estate firm Nitsba Holdings (TASE:NTBA).

The write off is necessary after Gmul converted half of the NIS 154 million loan it made to Nitsba in July of 1999, a CPI linked loan carrying annual interest of 5.5%.

The balance on the loan in the end of Q3 2001 totaled NIS 172.1 million. The loan was backed up with a non-negotiable bond, convertible to 15% of Nitsba shares.

According to the agreement, Nitsba could force Gmul to convert half of the loan into shares beginning January 26 2001, but Gmul announced it would do so in its Q3 2001 reports.

Nitsba will now allocate 2.7 million of its shares, worth NIS 39 million, to Gmul. The value of half of the loan now tops NIS 86 million, so on paper the loss is of about NIS 47 million. In the meantime, Gmul is making do with a NIS 27 million write-off.