Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) today made its first official offer for a bond settlement since announcing its intention to seek one at the end of August. In a notice to the Tel Aviv Stock Exchange (TASE) today, the company stated, "The company has begun a preliminary round of meetings to formulate the principles of a settlement with representatives of institutional investors, which together own a substantial part of the nominal value of all of the bonds of the company."
The announcement continued, "In this context, the company's management has suggested a preliminary structure for a settlement, which will apply to all the bondholders of the company."
The guiding principle of the proposed structure is that the book value of the various components included in the settlement will not be less than the par value of the bonds in the balance sheet - NIS 7.4 billion. The settlement package will not be less than this amount; in other words, the company is not planning a haircut for the bondholders.
Africa-Israel chairman Lev Leviev will not inject personal capital into the company, but the company will pay cash to the bondholders in the settlement, although the amount of funds is not stated. The company proposes issuing a new bond series, which will replace the present bonds, in an amount that will enable the company to cover its liabilities.
Africa-Israel also proposing issuing marketable deferred liability notes that are convertible to shares. The company will also issue new shares, which will dilute current shareholders' holdings.
Finally, as "Globes" previously reported, Africa-Israel will offer bondholders shares in four subsidiaries: Africa-Israel Properties Ltd. (TASE: AFPR), Africa-Israel Residences Ltd. (TASE:AFHS), Africa-Israel Industries Ltd. (TASE: AFID), and its Russian real estate arm, AFI Development plc (LSE:AFID).
While Africa-Israel's notice makes no mention of Leviev by name, the company implies that he will keep control of it: "The allocation of new shares in company will leave control in the hands of the present controlling shareholder." Leviev owns 74.8% of Africa-Israel.
Africa-Israel's share rose 2.4% in morning trading to NIS 42.71, giving a market cap of NIS 2.31 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 23, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009