As expected, Lapidoth Capital, controlled by Jacob Luxenburg, has won the pricing proceeding for the acquisition of Africa Israel, which will be part of a general court-sponsored debt settlement. The vote results published last Sunday show that 81% of Africa Israel's bondholders supported Lapidoth Capital's bid, compared with 19% who supported the bid by YH Dimri Construction & Development (controlled by Yigal Dimri).
In view of the results, Africa Israel and its bond trustees will soon petition the court to convene official meetings to approve the debt settlement. The parties can submit the petition soon, because in the previous round of voting, Lapidoth Capital and the bond trustees already agreed on all of the details for carrying out the settlement. The most recent bid submitted by Lapidoth Capital to the bondholders gives them a package with NIS 1.35 billion, while the remaining 40% of the debt will be written off.
A few hours before the vote earlier this week, YH Dimri unexpectedly notified the bond trustees that he wanted to lower this bid to acquire Africa Israel by NIS 11.5 million. In a letter to the trustees, the company wrote that it was revising its bid and withdrawing the letter it sent the previous day making a bid equivalent to that of Lapidoth Capital, because that letter had been sent "by mistake." The new letter lowered the value of the package offered by YH Dimri to NIS 1.3364 billion, making it worth less than the bid by Lapidoth Capital.
This measure undoubtedly led to a clear decision in the vote in favor of Lapidoth Capital's bid, which was submitted in cooperation with Altshuler Shaham Provident Funds and Pension. The two companies announced that they would deposit NIS 51.2 million with the bond trustees in the coming days, in addition to the NIS 30 million that they already gave the trustees when their previous bid was selected in the first round of voting.
In its current limited form, Africa Israel has two main activities. Africa Israel owns 100% of contracting and infrastructure company Danya Cebus, which itself holds a 74% controlling interest in residential construction developer Africa Israel Residences, a stake with a current value of NIS 880 million. In addition to these two assets, Africa Israel also has a large stock of cash and land in Savyon. As part of the settlement, the bondholders will receive an immediate NIS 861.5 billion payment from Lapidoth Capital and its partner and Africa Israel's NIS 487 million in liquid assets (minus tax payments and the costs of the settlement).
Published by Globes, Israel business news - en.globes.co.il - on October 10, 2019
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