In contrast to Series 9 bondholders who have rejected the debt settlement proposed by Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), representatives of long term bondholders today submitted a more positive response to the outline of the debt settlement proposed on Thursday by Prof. Amir Barnea.
Bondholder representatives told "Globes" today that Barnea's proposal is not very far from their own, and that the proposal is apparently close enough to be bridged, but is not good enough to close on.
The official response included two areas of disagreement.
The first reservation is regarding the worth of the company contained in Prof. Barnea's offer, which values the company at NIS 2.7 billion (assuming realization or wiping out debts on the New York Times building), while representatives of the bondholders insist on a value of NIS 1.2 billion, equal to the equity in the company's last financial report.
An additional dispute concerns the amount of money that Africa-Israel chairman and controlling shareholder Lev Leviev will inject into the company. As part of Barnea's settlement, Leviev would inject NIS 600 million in the company and reduce his holding to a 51% share. The bondholders representatives, who initially demanded that Leviev inject NIS 1 billion into the company, while reducing his stake to 45% after the settlement, are now prepared to settle for NIS 800 million.
The long term bondholders want the money injected into Africa-Israel in the following manner: NIS 370 million on the date of the settlement, NIS 130 million after one year, and NIS 300 million after two years from the agreement.
The bondholders agree that the shares of subsidiaries they will receive will be fixed according to the average of the book value and market value, as Prof. Barnea proposed.
The differences between Africa-Israel and long term bondholders are apparently being reduced with an agreement on the horizon. Holders of Series 9 bonds, which are due in several weeks, are being much more combative.
Published by Globes [online], Israel business news - www.globes-online.com - on October 25, 2009
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