Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) today notified the Tel Aviv Stock Exchange (TASE) that its has signed an agreement to restructure its debt on the old New York Times Building in Manhattan. Africa-Israel reduced its debt by 60% and conceded half of its stake in the property. Africa-Israel will also inject capital into the property.
Africa-Israel will record a $370 million capital gain on the deal, which it will record in the financial report for the fourth quarter.
In October, as it was in talks on the company's debt settlement, it was reported that the company was in advanced talks on restructuring the debt on the old New York Times Building. Africa-Israel owns the property through Africa-Israel Investments USA Inc.
Africa-Israel's outstanding debt on the property will be reduced from $652 million to $267 million. There is also a new $75 million credit line. Africa-Israel will inject $25 million into the property, and one of the lenders will inject $5 million and become a partner in the property.
The balance of the loan will be repaid in five years. The collateral provided by Africa-Israel USA to the lenders will be reduced or cancelled by $70-90 million. The lenders also receive various rights in return for reducing the debt, including half the rights to the building, and an option to buy space in it.
In a separate development, Africa-Israel unit Africa-Israel Residences Ltd. (TASE:AFHS) and its partner have sold the rights to a Tel Aviv lot for NIS 51.2 million. The partners owned the lot, slated for 42 apartments in equal shares. Africa-Israel Residences will carry out earthworks on the lot for a payment of NIS 9.8 million. The company estimates that it will report a post-tax profit of NIS 12 million on the deal.
Africa-Israel's share rose 7.9% in morning trading to NIS 51.90, and Africa-Israel Residences' share rose 3.9% to NIS 70.77.
Published by Globes [online], Israel business news - www.globes-online.com - on December 22, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009