Yesterday's Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) bondholders meeting concluded after discussing the repercussions of the profit warning by subsidiaries Africa-Israel Properties Ltd. (TASE: AFPR) and AFI Development plc (LSE:AFID), which handles the company's Russian activities. The parties agreed to allot an extra 5% of Africa-Israel Properties, worth NIS 60 million, to Africa-Israel's institutional investors as compensation.
The agreement means that Africa-Israel's debt settlement will hold, and that the company's shareholders will meet on March 14 to approve it, after which the settlement will go to the court for its approval.
Africa-Israel representatives, including CEO Izzy Cohen, met the bondholders at the office of Adv. Meir Lipa, who represents the bondholders.
The bondholders' representative body said in response, "On the basis of the adjustment mechanism stipulated in the debt structure, the bondholders will be compensated with shares in Africa-Israel Properties."
Cohen told the bondholders, "We had intended to carry out the write-down in any case, the Israel Securities Authority report simply increased it by $60-70 million."
The bondholders asked Cohen when he knew about the write-down. He replied that the company began to grasp the extent of the write-down when it began calculating its position in its covenants set out in the debt settlement.
Africa-Israel Investments' share rose 1.3% in early trading today to NIS 59, and Africa-Israel Properties' share was unchanged at NIS 55.13. AFI Development's share price fell 1% at the opening in London to $2.
Published by Globes [online], Israel business news - www.globes-online.com - on March 2, 2010
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