Moti Ben-Moshe can get down to work at last. After Africa-Israel Investments Ltd.'s (TASE:AFIL) second debt arrangement received the blessing of the court yesterday, Ben-Moshe and the companies he controls can start raising the cash required to complete the settlement.
Under the arrangement, the bondholders will receive NIS 2.3 billion in exchange for their agreement to transfer to Ben-Moshe full ownership of Africa-Israel. Initially, however, in order for the settlement to be implemented, Ben-Moshe and the companies under his control will be required to inject a lower sum, NIS 1.425 billion, which will rise substantially in the coming years.
On the day the settlement is completed, Ben-Moshe's privately held company Extra will buy Africa-Israel for NIS 135 million. Africa-Israel will simultaneously sell its controlling stake (55.9%) in Africa Israel Properties Ltd. (TASE: AFPR) to Alon Blue Square Ltd., also owned by Ben-Moshe, for NIS 1.29 billion.
Ben-Moshe acquired Alon Blue Square two years ago in a debt settlement, at a total investment of NIS 430 million. Alon Blue Square is a holding company that controls income producing property company Blue Square Real Estate, the Dor Alon chain of fuel stations and convenience stores, and the Na'aman store chain. Under Ben-Moshe's direction, Alon Blue Square has managed to repay all its debts to its previous creditors (the banks and bondholders), amounting to NIS 950 million, and to issue new bonds for a similar amount.
Alon Blue Square posted a net profit of NIS 56 million in the first half of 2018, following a profit of NIS 131 million in 2017 as a whole. The company had shareholders' equity of NIS 818 million at the end of June 2018, since when Ben-Moshe has transferred to it an additional asset, raising its shareholders' equity to NIS 919 million.
The asset in question is the rights that Ben-Moshe acquired in private power plant IPM in Be'er Tuvia. With this asset, Alon Blue Square's net asset value is NIS 927 million.
Alon Blue Square had NIS 222 million cash at the end of June this year. In order to finance the purchase of the controlling stake in Africa-Israel Properties, it will have to make a further debt offering, or find alternative sources of finance. The company is currently examining all the possibilities available to it, and has not yet decided how it will finance this substantial acquisition.
Published by Globes [online], Israel business news - www.globes-online.com - on September 3, 2018
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