While negotiations for a second debt arrangement involving Africa-Israel Investments Ltd. (TASE:AFIL) are getting underway, the company, controlled by Lev Leviev, reported that it was negotiating the sale of its holdings in the Crowne Plaza hotels in Tel Aviv, Jerusalem, and Eilat.
Africa Israel owns the properties through a subsidiary, Africa Israel Hotels (TASE: AFHO), which it controls in an equal partnership with Netz Group Ltd. (TASE:NETZ), controlled by CEO Zvi Itzik, chairman Tony Elicha, and Jacques Amouyal. Africa Israel sold half of Africa Israel Hotels to Netz in 2010 for NIS 182 million. Africa Israel Hotels has a franchise to operate the Crowne Plaza and Holiday Inn hotel chains in Israel.
Africa Israel said, "It has been agreed by the parties that the proceeds in respect of the properties sold will total NIS 718 million (plus VAT, if applicable), while part of this sum will be provided by the buyer as an owners' loan to the subsidiaries for the purpose of repaying bank loans." Africa Israel added, "There is no certainty that the parties will reach agreement on the terms for the agreement in principle."
The three hotels being sold have a total of 900 rooms, and Africa Israel Hotels also owns hotels in Haifa, the Dead Sea, Ashkelon, and the Azrieli Center in Tel Aviv. Africa Israel Hotels' revenue grew 7% to NIS 384 million in 2015, and its gross profit was up 5% to NIS 191 million. The company had a NIS 2 million net loss for the year, after losing NIS 15 million in 2014 (Operation Protective Edge had a negative impact on its results), while its operating profit zoomed 80% to NIS 25 million in 2015.
Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2016
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