Meir Shamir offers to buy Africa-Israel for half of debt

Meir Shamir

Under the revised offer by Mivtach Shamir, the bondholders will receive over NIS 1 billion.

Mivtach Shamir, controlled by Meir Shamir, is continuing its efforts to acquire Africa-Israel in its current reduced format. Africa-Israel today reported that it had received a memorandum of principles from Mivtach Shamir for acquiring Africa-Israel through an overall debt arrangement with Africa-Israel's bondholders, under the court's auspices.

According to the document, on the date on which the arrangement is implemented, Mivtach Shamir will be allocated 100% of Africa-Israel's issued share capital, while the shares currently held by Lev Leviev and public will be nullified (invalidated, in legal language). Africa-Israel's bondholders will receive a package worth NIS 1.1-1.3 billion.

This is the third bid submitted by Mivtach Shamir to Africa-Israel and its bondholders. In contrast to the previous bids, this bid was submitted following extensive consultation by Mivtach Shamir and its representative Erez Meltzer with the representatives of the Africa-Israel bondholders and the trustees of the bond series and their legal and financial advisers. Thanks to these consultations,  the offer will be discussed at an upcoming meeting of the bondholders, after which the bondholders will vote on whether to accept it.

The Africa-Israel real estate group has been in a state of insolvency for three years. During that time, it has sold its activities in Russia and Eastern Europe and its activities in Israel in income-producing properties, hotels, and toll roads. Following the sale, Africa-Israel was left with the construction and infrastructure activity of its Danya Cebus subsidiary, residential housing development activity of its sub-subsidiary Africa-Israel Residences, and land in the Savion area.

The sale of assets left Africa-Israel with a NIS 2.2 billion debt to holders of its Series 26 and Series 28 bonds, including interest and linkage. The proposed settlement therefore involves writing off NIS 1 billion of the remaining debt.

As part of the arrangement proposed by Mivtach Shamir, the bondholders will waive their full existing rights in the company, and will receive NIS 335 million in cash from Mivtach Shamir in two payments. The bondholders will also receive all of Africa-Israel's remaining cash on the date on which the arrangement is completed, minus NIS 70 million in income tax and all of the expenses to be paid in respect of the arrangement: the trustees' fees, the representatives' fees, the legal and financial advisers' fees and the fees of the court-appointed expert. These expenses are estimated in the tens of millions of shekels.

Mivtach Shamir is also offering the bondholders an amount equivalent to their relative share of the estimated NIS 13 million in cash currently held by Savion Nurseries; 14% of Danya Cebus's shares in Africa-Israel Residences, worth NIS 140 million; the right to 50% of Danya Cebus's cumulative net profit over six years, with a commitment to a minimum of NIS 80 million (under certain conditions); and the proceeds to be received from the sale of the company's land rights in Savion.

Published by Globes, Israel business news - en.globes.co.il - on August 1, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018