The second bond settlement for Africa-Israel Investments (TASE: AFIL) is on the verge of breaking down after the mediation between the company's bondholders and investor Moti Ben-Moshe reached a dead end. The two sides moved to improve their respective positions ahead of a court contest over the NIS 90 million deposit that Ben-Moshe made to secure the deal.
The parties met last week with mediator Adv. Zuriel Lavie to discuss the bondholders' demand for compensation because of delay in completing the arrangement. After one mediation meeting, however, the process was halted, and the bond trustee convened a closed bondholders' meeting on Thursday for consultation purposes.
Following this meeting, the bond trustee yesterday sent a letter to Africa-Israel's management demanding that communication with Ben-Moshe be cut off. After this letter was sent, Ben-Moshe demanded that the trustee return his deposit because all the suspending conditions for the arrangement to become effective had not been fulfilled by the December 13, 2018 deadline.
The trustee has yet to respond to Ben-Moshe's letter; instead, he summoned the bondholders to vote on a resolution giving Ben-Moshe an extension until December 31, 2019 to complete the arrangement. This resolutions differs from the one that the bondholders voted on earlier, which made an extension for Ben-Moshe contingent on payment of NIS 15 million in interest, increasing his deposit by NIS 40 million, and consent to forfeiture of the deposit if all the approvals for the arrangement are not obtained by the end of January.
A renewed court hearing on the question of who bears responsibility for the breakdown of the debt arrangement and who is entitled to the deposit now appears inevitable.
Published by Globes, Israel business news - en.globes.co.il - on December 31, 2018
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