Vitania Faces Midroog Credit Review Over Ness Ziona Deal With Benny Landa
Vitania's planned acquisition of Benny Landa's stake in a Ness Ziona project faces a negative credit rating review by Midroog due to mounting debt and tax liabilities, despite securing a major lease agreement with Elbit Systems.
The complex deal involving real estate company Vitania and businessman Benny Landa has prompted credit rating agency Midroog to issue a warning regarding potential negative impacts. Vitania is currently negotiating to acquire full ownership of Landa's private companies' stakes in the first phase of a project in Ness Ziona, where both parties currently hold equal shares.
Financial Structure and Implications
If completed, Vitania will hold 100% of the project's first phase but will assume Landa's bank debt of approximately 247 million shekels, alongside waiving a 50 million shekel debt owed by Landa to the company. Consequently, Vitania estimates it will incur roughly 18 million shekels in purchase tax and an accounting loss of about 50 million shekels.
Midroog notes that the net financial debt-to-capital ratio is expected to rise to approximately 65%, up from 58%-62% in previous baseline scenarios. Furthermore, the net financial debt-to-FFO ratio is projected to stand at 45 to 55 years for 2026-2027, compared to 38-45 years previously.
"Following the transaction, Vitania will hold the asset entirely and be entitled to all its revenues, but will correspondingly bear the entire associated debt burden."
Mitigating Factors and Future Outlook
Despite the downgrade review to il.A2 with negative implications, Midroog highlights key mitigating factors. Most notably, following an agreement with Elbit Systems, the project boasts a high-quality tenant and a long-term lease. In May 2026, Vitania reported that Elbit Systems will lease approximately 40,000 square meters in the project, alongside 617 parking spaces, fundamentally transforming the asset's economic outlook after Landa's original digital printing venture faced insolvency.
