Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY), controlled by chairman Lev Leviev, added a going concern warning to its financial report for the third quarter, which it published today. Three months ago, the company shook the capital market when it announced that it could not meet its commitments and would try to seek a debt settlement. The company and its debt settlement saga have been in the headlines ever since.
Africa-Israel narrowed its net loss to NIS 389 million for the third quarter from NIS 2.14 billion for the corresponding quarter of 2008.
Probably the most important item in the financial report is the going concern warning. Earlier this month, Africa-Israel warned that it may attach a going concern warning to its financial report because it might not be able to meet its commitments. The financial report states, "In view of the possibility that the holders of all of the bonds issued by the company could demand immediate repayment, and in view of the uncertainty about reaching a debt settlement and its approval by the court, there is material doubt about the company's continuing as a going concern."
The main cause of Africa-Israel's third quarter loss was its high financing expenses, caused by the Consumer Price Index (CPI). Its financing expenses rose by 8% to NIS 461 million for the third quarter from NIS 426 million for the corresponding quarter. The company also reported a NIS 145 million depreciation on its inventory of land and properties for sale and a NIS 107 million loss on net fair value valuations of investment properties under construction.
Published by Globes [online], Israel business news - www.globes-online.com - on November 29, 2009
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