The Marker, Eran Azran, 03.05.2020

The Castro Hoodies Group on Sunday announced an agreement to sell its rights to land in Bat Yam Demri for about NIS 140 million. The proceeds will be paid in two installments: the first, in the amount of NIS 49 million, was paid today and is held in trust until a warning is issued in favor of the buyer; A second payment, of NIS 91 million, will be paid at the time of delivery of the land, no later than 120 days from the date of signing the entire sale agreement.

On the land, in an area of ​​7,500 square meters, is the Castroheadquarters building . As part of the sale agreement, Castro will continue to lease from the buyer the offices of the company headquarters located on some of the land sold.

The land is listed in Castro's books at a value of about NIS 44 million. In respect of the sale, and subject to its completion, Castro is expected to record a pre-tax profit in its financial statements in the range of approximately NIS 21 million to NIS 39 million, inter alia, depending on the amount of the final tax payments set by the Company for the transaction.

Castro ended 2019 with a deep loss of NIS 84 million. The loss eroded the company's equity to NIS 540 million. Castro's balance sheet includes intangible assets and tax assets with a total value of approximately NIS 250 million. That is, its tangible equity is low - amounting to NIS 300 million. The exercise will help increase capital and provide cash.

Ron Rotter, Deputy CEO of Castro-Hoodies Group, commented: "We are continuing our efforts to realize a strategic plan to deal with the consequences of the Corona crisis. $ 83 million to join the company's existing balances and be used for the company's current needs. "