Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), controlled by chairman Lev Leviev, has sold an undeveloped Miami property for $39 million, less than half its original asking price of $88.7 million. The sale of the 24,427-square meter lot, known as Block 42, is part of a legal settlement with the buyer.
Africa-Israel will nevertheless report a capital gain of $7 million despite the 56% discount.
The buyer had sued six Africa-Israel subsidiaries for not meeting the financial covenants, and had demanded the refund of the $18 million deposit given to the companies. The buyer will withdraw the lawsuit when the deal is closed.
Under the settlement, the buyer gave another $1 million deposit with the closing set for September 14. The closing can be extended by one month in exchange for another $1 million deposit. The buyer will pay $16.5 million at the closing (or $15.5 million in the event that the buyer exercises its option to delay the closing). The buyer also has an option to receive a $3.5 million seller's loan from Africa-Israel to finance the balance of the payment. The loan will be repaid in two installments, after 12 and 24 months from the closing. Africa-Israel will have a lien on two of the lots of the property, with a total area of 5,157 square meters, as a guarantee of the loan.
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2009
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