Banks summon Israeli developers to pay back loans

Alpha Bank and Bancpost have sent “ultimatums” to Israeli companies for the repayment of loans worth above 6m euros, after the developers that borrowed money to buy plots of land in Romania no longer built the apartment projects for which land was bought, and hence they could not meet their obligations. Profit Building and New Horizon companies, which announced plans for the construction of over 1,000 apartments in Romania, are due to pay back 1.5m euros to Alpha Bank, as part of a loan worth almost 3m euros taken out for the acquisition of a plot in Piatra Neam], while Intercolony Investments has 5.2m euros falling due today to Bancpost, according to Globes Israeli publication. “This is not a generalised situation. Real estate developers, like any other company, draw up business plans depending on a series of parameters that take into account the market and the situation of their own company. There are situations where these business plans cannot be pursued accordingly, and the reasons are multiple, from external to internal factors. An amiable agreement is preferred. However, when the situation requires it, legal recovery ways are resorted to,” explain Bancpost representatives.