A new player has entered the bidding for Africa-Israel Investments Ltd. (TASE:AFIL). Lapidoth Capital, controlled by Jacob Luxenburg, has reported that it submitted a non-binding offer to the Africa-Israel bond trustees to buy the company outright for NIS 830 million cash, to be paid to the bondholders. Lapidoth Capital says that this offer is actually better than the offer valued at NIS 870 million by Shikun & Binui Holdings Ltd. (TASE: SKBN) and Mivtach Shamir, since the latter involves a NIS 50 million tax bill for the bondholders.
Under Lapidoth Capital's proposal, the deal will be part of a general debt settlement for Africa-Israel, and it includes all the company's assets apart from 4.99% of the shares in Africa-Israel Properties and 73% of Africa-Israel Industries, which collapsed. These two holdings will be transferred to the bondholders.
This proposal differs from that of Shikun & Binui and Mivtach Shamir, which called for the purchase by Shikun & Binui of Africa-Israel in a debt settlement for NIS 350 million and the transfer to the bondholders of construction company Danya Cebus and Africa-Israel Trade and Agencies Ltd. (this in addition to the holdings specified in the Lapidoth Capital proposal). As part of the proposal, Mivtach Shamir would buy Danya Cebus from the bondholders for NIS 520 million.
Africa-Israel Trade and Agencies holds about half the shares in Danya Cebus. According to Lapidoth Capital, when the offer for Africa-Israel by Moti Ben-Moshe was examined, the court-appointed expert estimated that the sale of Danya Cebus would give rise to a tax liability for Africa-Israel Trade and Agencies (which would be owned by the bondholders) of NIS 50 million.
Lapidoth Capital says that it intends to enter into negotiations with Africa-Israel and the bondholder representatives on the formulation of a binding agreement to be put to a bondholders meeting.
Africa-Israel owes its bondholders NIS 3.26 billion. The bondholders will shortly receive NIS 1.24 billion from the sale of 50.94% of Africa-Israel Properties, and a further NIS 135 million from the sale of the remaining 4.99% holding in the same company. If the bondholders accept Lapidoth Capital's offer, they will receive a total of NIS 2.2 billion, representing a 32% haircut on the adjusted value of the debt.
Lapidoth Capital is a listed holding company with a market cap of NIS 610 million. 85% of its shares are owned by Luxenburg. The company and its holdings deal in international trade, drilling for water, gas and oil exploration, and the importing of Samsung telephones.
Published by Globes, Israel business news - en.globes.co.il - on March 14, 2019
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