Sale of the controlling interest in Africa-Israel Investments Ltd. (TASE:AFIL) to Moti Ben-Moshe and Lev Leviev is not going ahead as of now, and is not regarded by representatives of the company's bondholders as the preferred alternative. This is indicated by a notice published by the trustee for the Africa-Israel Series 26 and 27 bonds summoning the bondholders to a joint meeting on Wednesday.
Informed sources say that the bondholders' representatives are inclined to support a proposal by some of the bondholders to sell Africa-Israel's assets individually, starting with the sale of the controlling interest in Africa-Israel Properties Ltd. (TASE: AFPR), a subsidiary of Africa-Israel.
The summons says that there will be three items on the meeting's agenda. The first is "a discussion of bids to acquire control of the company already received, or that will be received by the date of the meeting, including a bid by Saidoff received on June 1, 2017. The bids that will be received for acquisition of control in the company will be published later separately, close to the date of the meeting."
The second item for discussion includes a discussion and consultation concerning the entering into proceedings for convening a meeting of holders of shares in Africa-Israel Properties, which are attached in favor of the bondholders (Series 26 and 27). The third item is general - a discussion of additional topics to be raised at the meeting by the bondholders or the trustee for the bond series.
Africa-Israel owes NIS 2.89 billion to its bondholders, including NIS 2.56 billion to holders of Series 26 and Series 27 bonds; the remainder is owed to holders of Series 28 bonds. Almost all of the 56% controlling interests in Africa-Israel Properties is attached in favor of the holders of Series 26 and 27 bonds; these shares have a current market value of NIS 1.24 billion. A court petition to foreclose the lien should lead to payment of 45% of the debt, if not more, for these two series within a relatively short time.
For this reason, the bondholders' representatives apparently prefer to begin selling this important asset now, after which they can foreclose the other assets, headed by a 74% controlling interest in Africa-Israel Residences Ltd. (TASE:AFRE). On the other hand, other bids will be brought up for discussion at the upcoming meeting, including the Saidoff brothers' bid.
The bid by Ben-Moshe and Leviev was not specifically mentioned in the summons, although it had been previously reported that they had reached agreement with the bondholders' representatives. It is possible that this may involve opposition by the representatives to Ben-Moshe's proposal that they declare that they prefer his bid.
According to the Saidoff brothers' bid, the proceeds for the shareholders from the shares in Africa-Israel will consist of NIS 400 million in cash for the bondholders, NIS 400 million in short-term bonds payable within a year of the settlement, and NIS 1.15 billion in two series of long-term bonds.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 4, 2017
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