Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK) chairman and controlling shareholder Lev Leviev will put up a further 20% of Africa-Israel's share capital as collateral, a move which will secure a total of 75% of the controlling interest in the company as collateral to the two big banks, Bank Hapoalim (LSE: 80OA; TASE: POLI), and Bank Leumi (TASE: LUMI). Leviev took the measure following the financial crisis which has caused a sharp fall in the market cap of Africa-Israel's subsidiaries, and at the same time, increased pressure on the group from the banks.
Last week "Globes" revealed that Africa-Israel Properties (TASE: AFPR) had approached insurance companies with an offer to sell the Government Complex building in Tel Aviv for NIS 1 billion. The 38-storey, 70,000-sq.m Government Complex building, which was built in 2005 by Africa-Israel and Minrav Holdings Ltd. (TASE: MNRV), is located at the corner of Kaplan Street and Menachem Begin Road in Tel Aviv, across the street from the Azrieli Towers and the IDF General Staff Headquarters, and also has a six-floor underground parking garage.
Africa-Israel 18 series of issued bonds, 10 of which are traded. In recent months, the yields of some on these bonds have soared to levels that reflect fear of insolvency. The poor market sentiment towards real estate and towards the company has sent yields on some of its traded bonds to over 15%. Africa-Israel Investments' liabilities, including its bank debt, debts to bondholders, and commercial paper, total NIS 8.6 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2008
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