The spat between Africa-Israel chairman Lev Leviev and US developer Shaya Boymelgreen, his main business partner in the US, has gone up a peg.
Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) today unveiled an ultimatum in its 2006 financial report to Boymelgreen Developers LLC to repay a $142 million debt within nine days. The debt totaled $110 million a year ago. Shaya Boymelgreen personally guaranteed the debt.
Africa-Israel says that in the event that Boymelgreen Developers is unable to repay the outstanding debt by April 4, 2007, Africa-Israel can convert the debt into shares into their joint holding companies.
Leviev and Boymelgreen met on a pleasure ship and became partners in a fertile real estate venture in the US, Leviev Boymelgreen in which Africa-Israel owns 65% and Boymelgreen Developers owns 35%. In April 2002, Boymelgreen signed an agreement with Africa-Israel, which turned Boymelgreen from a mid-sized developer into a well-known contractor in New York and Miami. Both partners exploited rising housing prices in the two cities. Boymelgreen contributed his know-how and market ties, while Leviev provided the bulk of financing for the deals.
However, the relationship began to sour, and Boymelgreen began operating independently in Israel. He acquired a stock market shell that he converted into Boymelgreen Capital Ltd. (TASE:BMGN) and acquired Azorim Investment, Development and Construction Ltd. (TASE: AZRM) from IDB Holding Corp. Ltd. (TASE:IDBH), which positioned him as a direct competitor of Leviev in the domestic housing market.
Published by Globes [online], Israel business news - www.globes.co.il - on March 26, 2007
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