With the talks for an Africa-Israel Investments Ltd. (TASE:AFIL) debt settlement reaching an advanced stage. Africa Israel Hotels (TASE: AFHO) and Netz Hotels Ltd. (TASE:NZHT), which are partners in the hotel business, yesterday completed deals for the sale of the Crowne Plaza Tel Aviv and Eilat hotels and two other hotels in Eilat (Be City and La Playa) for NIS 524 million. Most of the price was for the Plaza hotels.
This amount is the full payment in the deal, plus NIS 20 million for the Crowne Plaza Jerusalem Hotel, for which the deal has not yet been completed. If it does not go through, the NIS 20 million will be compensation for the sellers under certain conditions. Africa-Israel and Netz Hotels hold the properties through their AFI subsidiary, which owns the franchise to operate the Crowne Plaza and Holiday Inn hotel chains in Israel.
Netz Hotels is controlled by Netz Group Ltd. (TASE:NETZ), whose controlling shareholders are CEO Tzvi Itzik, chairman Tony Elicha, and Jacques Amouyal. The companies estimate their cash flow from AFI at NIS 156 million, net of repayment of the bank debts, working capital, and transaction expenses.
At the end of 2016, the parties postponed the deadline for fulfilling the suspending conditions for the sales of the hotel in Jerusalem, in view of the need for a clarification of additional construction rights for the property in the urban building plan. The property is to be sold for NIS 255 million.
The three Crowne Plaza hotels being sold have a total of 900 rooms. AFI also owns hotels in Haifa, the Dead Sea, Ashkelon, and the Azrieli Center in Tel Aviv.
Another stage in the debt arrangement
In recent days, Africa-Israel's second debt arrangement has advanced another stage, after several bids were obtained from various investors, including a joint bid by Lev Leviev and Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI) controlling shareholder businessman Moti Ben-Moshe.
Africa-Israel owes NIS 2.8 billion to holders of three series of its bonds. Africa-Israel's holdings in AFI are one of its leading assets, a major part of whose activity has now been sold. AFI reported a 3% increase to NIS 300 million in its revenue in the first nine months of the year, but its operating profit plummeted 52% to NIS 13 million, due among other things to the effect of a drop in assets value and one-time revenue in 2015. AFI reported a net loss of over NIS 3 million in January-September 2016, after losing NIS 2 million in all of 2015. Its equity stood at NIS 132 million at the end of September.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 19, 2017
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