Aya New York pledged future income from assets already pledged to bondholders

Aya New York pledged future income from its assets, despite the fact that they are already pledged to its bondholders. This is revealed by the company in its financial statements for the second quarter of 2026. Aya notes that during the preparation of the reports, it was found that some of the companies that took out loans and sold future receipts are companies whose assets are pledged to bondholders. This could have constituted a breach of the company's obligations under the trust deed of the bonds it raised.

Aya acted to amend the agreements so that from the date of the original engagement, these companies are not a party to the agreement, have no obligations under the loan agreement, and no liens have been registered in connection with the assets. To simplify the matter: the two subsidiaries that hold two multi-family assets pledged to bondholders as part of the issuance did something they were not allowed to do according to the trust deed that constitutes the loan terms with the holders, and pledged future income that they were not allowed to pledge. According to the company, it discovered this only during the preparation of the reports and corrected the error.

However, it seems that the Securities Authority will require clarifications from the company against the backdrop of two previous events this year at BVI companies: the summer camp company Simed, whose owner emptied its coffers and it collapsed, and the commercial center company Kohan, where the owner also took funds without approval. Here too, the board of directors and the company's accountants will be required to answer the question of how they did not discover this in real time and did not report it to investors.

Aya New York was founded and is held by former Israeli Amir Shariki, and it is a foreign company (BVI) that issued bonds last February for 292 million shekels with an annual interest rate of 7.7%. The company was incorporated with the goal of absorbing five income-generating assets in Manhattan that it purchased in the last two years and carried out improvement procedures on them. For the benefit of its bondholders, the company provided a lien on two multi-family assets worth 137 million dollars.

Following the issuance, Aya New York was sued by Value Base Underwriting, which led the fundraising, claiming that the company is not transferring 11 million shekels in underwriting fees for the issuance. In the lawsuit, Value Base revealed that Shariki tried to raise bonds twice before, without success, and that the failures in their opinion were due to the fact that he demanded that the issuance funds be used, among other things, to return money from the company to him. Aya New York rejected the demands and claimed that they contradict the agreement between the parties. Shariki, by the way, holds 30 million bonds of the company.

The company's assets are divided into residential real estate that it buys and improves, and hotels that it acquires, improves, and transfers for operation by companies specializing in this. Last July, a subsidiary of Aya entered into a binding financing agreement for 15 million dollars for two years. The financing was intended for adding service areas and facilities to the Lady Di hotel, which is not among the two assets pledged to the company's bondholders. The hotel, located in Manhattan, includes 166 guest rooms and its opening is expected in January 2027. 13.7 million dollars will be invested in the hotel's renovation, of which 4.8 million dollars have already been invested. It is unclear if the loans were taken for the purpose of financing the renovation.

Aya New York stated: "Contrary to what is claimed, the company reported according to the law and on time. The issue was identified by the company as part of the controls conducted as part of the preparation of the financial statements. Once the matter became known, the company acted immediately to settle it, and the relevant financing agreements were amended so that the companies pledged to the bondholders are not a party to them, effective from the date of the original engagement. Thus, the issue that required correction was removed, without causing damage to the collateral or the rights of the bondholders. As detailed in the reports, the loan-to-value ratio currently stands at about 62%, and the volume of short-term financing in question constitutes only about 2% of the company's total liabilities."