Two days after announcing the opening of the first section of Road 431, Danya Cebus Ltd. (TASE: DNYA) today admitted that the draft agreement had not been signed after all and that the company had not obtained a final permit to open the road from the Ministry of Finance. The company now believes that the draft will be signed "within a few days".
On Sunday, Danya Cebus announced that it had completed the first section of lateral Road 431 between Modi'in and the Aneva Junction with the Tel Aviv-Jerusalem highway, Road 1. Traffic from Tel Aviv to Modi'in will begin the next day.
The permit from the Ministry of Finance is material, because completion of the section ahead of schedule entitles Danya Cebus to a NIS 95 million bonus within 45 days as well as NIS 1 million in royalty payments a month under the terms of the franchise contract. The company and the ministry are involved in a $100 million financial dispute regarding Road 431, which is still in arbitration.
Danya Cebus added that a decision to approve safety rails had been postponed until the next meeting by the authorized agency next month. The company said that if the delays persist and no permit is obtained, it will have "a material adverse affect on the company."
Danya Cebus is the contracting arm of Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY).
Published by Globes [online], Israel business news - www.globes-online.com - on June 17, 2008
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