Africa-Israel Investments Ltd. (TASE:AFIL) contracting arm Danya Cebus Ltd. (TASE: DNYA) today completed the sale of 75% of Road 431 operator Netivei Hayovel Ltd. to Israel Infrastructure Fund (IIF) for NIS 207.6 million. The company will report a pretax capital gain of NIS 75 million on the sale as well as a pretax revaluation gain of NIS 25 million on its remaining 25% stake in the company.
The 23-kilometer Road 431 links Modiin to Rishon LeZion. It has 12 interchanges, including with the Tel Aviv-Jerusalem highway (Road 1), Geha (Road 4), and the Ayalon Highway (Road 20). Netivei Hayovel completed construction of the road under a BOT (build, operate, transfer) contract in 2009, and its operating franchise will end in 2031.
In March 2008, Danya Cebus unexpectedly announced a profit warning for its 2007 results, due to massive cost overruns on the contracting work for Road 431, resulting in net losses for the company and a reduction in its shareholders' equity. Africa-Israel, under chairman Lev Leviev, intervened in the subsidiary, replaced its management, changed procedures, injected capital, and put the company back on the road.
Danya Cebus's share price rose 5.9% by mid-afternoon today to NIS 13.50, giving a market cap of NIS 362 million.
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011