Israeli entrepreneur Amir Shriki is ending his eight-month venture in the Tel Aviv capital market as his real estate company, Aya New York, has decided to immediately redeem bonds totaling 292 million shekels ($95.4 million). The move follows a dispute with institutional investors over undisclosed property lien arrangements, prompting Shriki to exit the market entirely after citing widespread discrimination against American BVI companies.
Aya New York Redeems Bonds at Par Value
The company will present the early redemption proposal at a bondholders meeting this week. The plan offers to repay the bonds at 100% of par value, even though they trade at 86%. Shriki formulated the proposal alongside major bondholders Yelin Lapidot and Meitav, as well as Mishmeret Trust Company. Two Manhattan properties valued at $137 million serve as collateral for the series.
Shriki stated that he secured $100 million from a major international bank at an annual interest rate below the 7.7% required by the Israeli bond series. The entrepreneur launched the firm in Manhattan in 2007, operating a co-living and property improvement model with a portfolio of five buildings.
Dispute Over Pledged Proceeds Sparks Exit
The conflict began when second-quarter financial statements revealed that Aya subsidiaries had entered agreements committing future proceeds, including on properties pledged as collateral. Holders of 45% of the bonds subsequently appointed attorneys Guy Gissin and Yael Hershkovitz to represent them. The investors alleged that the company committed violations by placing an additional $3.3 million lien on assets.
Shriki stated that the additional lien resulted from a misunderstanding used to buy out a minority partner. The company corrected the issue within 48 hours after consulting the Fischer law firm. Value Base, the underwriter for the bond offering, also entered into a separate legal dispute with the firm after demanding 8 million shekels ($2.6 million) in success fees rather than the 5.3 million shekels ($1.7 million) initially transferred.
Market Loss of Confidence Drives Decision
Shriki pointed to broader market turbulence involving American BVI companies, citing events at Simad and Kahan GFI where owners withdrew funds. He concluded that American firms lacked fundraising prospects in Israel for the next two years. The entrepreneur noted that dealing with Israeli bondholders consumed valuable resources and created unnecessary administrative friction.
Diana Shriki, an attorney at the Firon law firm and wife of the entrepreneur, previously warned him against entering the local capital market. Shriki acknowledged that her warning proved accurate regarding the operational challenges of maintaining dual-market presence. He currently operates the company from Israel while managing properties in Manhattan across a significant time difference.
Investor Questions About the Aya New York Redemption
- How much are the bondholders owed in total?
- Aya New York is redeeming bonds totaling 292 million shekels, which equals approximately $95.4 million.
- What collateral supports the outstanding bonds?
- Two Manhattan properties valued at $137 million serve as collateral for the bond series.
- Who represents the institutional bondholders in the dispute?
- Attorneys Guy Gissin and Yael Hershkovitz represent holders of 45% of the bonds.
“I met with the major bondholders, Yelin Lapidot and Meitav, as well as the bond trustee, and I decided to redeem the bonds early at par value (100%), even though they are trading at 86% of par.”
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