Swiss retail group Jelmoli has reached a settlement with the Israeli-UK consortium of investors which pulled out of the EUR 2bn deal to buy 88 Jelmoli department stores last year. Jelmoli said that consortium member Delek Blenheim Group will pay Jelmoli CHF 21.5mln (EUR 13.2mln) as final settlement of all their mutual claims arising from the aborted sale-and-leaseback transaction. Delek Blenheim Group has agreed to waive the counter-claim for repayment of the downpayment made to Jelmoli.
Swiss retail group Jelmoli has reached a settlement with the Israeli-UK consortium of investors which pulled out of the EUR 2bn deal to buy 88 Jelmoli department stores last year. Jelmoli said that consortium member Delek Blenheim Group will pay Jelmoli CHF 21.5mln (EUR 13.2mln) as final settlement of all their mutual claims arising from the aborted sale-and-leaseback transaction. Delek Blenheim Group has agreed to waive the counter-claim for repayment of the downpayment made to Jelmoli.
The agreement brings to an end an arbitration process launched by Jelmoli in early January this year after the consortium failed to close the mega deal to acquire Jelmoli's properties. The sale was initially agreed on 31 July 2007, just before the onset of the credit crunch. The buyers pulled out of the sales agreement after failing to raise the necessary financing.
The consortium comprised AIM-listed Delek Global Real Estate and Israeli-based groups Delek Belron International and Blenheim Properties Group. Empario, the holding company created for the Jelmoli deal, was also a named party in the arbitration action. Jelmoli and the consortium members will bear their own legal costs and will share in equal parts the costs and expenses of the arbitration process.
Jelmoli began working on a strategic plan to split into separate listed real estate and investment firms following the collapse of the sale agreement. It said recently that it is making good progress on implementing the plan.
