In an unusual move, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) has sold ten empty lots in its project in the Tel Aviv suburb of Savyon for cash and its own bonds. The deal was made after the company ended its relationship with the Hagag buyer's group last month for the marketing of 30 lots in the project.
The buyers paid NIS 12.42 million in cash and NIS 33.2 million in Africa-Israel bonds. The company bought back the bonds at NIS 0.65 per NIS 1 par value.
Africa-Israel owns the project through Africa-Israel Residences Ltd. (TASE:AFHS). Six lots are one dunam (0.25 acres) in area and four are half a dunam (0.125 acres). The buyers paid NIS 4 million for each one-dunam lot and NIS 2.5 million for each half-dunam lot, including VAT.
Africa-Israel's board, headed by chairman Lev Leviev, believes that the sharply worsening global financial crisis and its repercussions on capital markets internationally and in Israel has slashed prices for bonds of many companies, including Africa-Israel's bonds that are listed for trade on the Tel Aviv Stock Exchange (TASE). This erosion in prices has created an opportunity that the company said could not be ignored.
Africa-Israel added that, under these circumstances, the company will seek to reduce its future liabilities by buying back bonds at a discount. The company notes that many public companies have been carrying out similar policies in recent months.
Africa-Israel's share fell 1.1% in early trading on the TASE to NIS 34.70. Africa-Israel Residences share was unchanged at NIS 22.92.
Published by Globes [online], Israel business news - www.globes-online.com - on February 16, 2009
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