Efforts to reach a debt settlement at Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) are moving forward at full speed. After reaching a structure for a settlement with bondholders, except for Series 9 bondholders, Africa-Israel chairman and controlling shareholder Lev Leviev needs the support of the banks, beginning with his "silent partner", Bank Hapoalim (TASE: POLI) Last night, Leviev reached an understanding with some of the banks - but not Bank Hapoalim to which he owes NIS 2.5 billion through his private company, Memorand Management (1998) Ltd.
Leviev agreed to provide additional guarantees in the form of personal assets. He will also transfer NIS 200 million to the banks. A transfer to Bank Hapoalim is expected to be larger. In late August, "Globes" reported that Leviev put a lien on high-quality land in Moscow in favor of Bank Hapoalim, in order to increase his collateral.
Yesterday, "Globes" revealed that Bank Hapoalim is leading an effort to condition its approval of the Africa-Israel debt settlement on Leviev injecting an additional NIS 800 million cash into Memorand, on top of the NIS 750 million he has committed to paying Africa-Israel's institutional bondholders.
Bank Hapoalim, Memorand's largest creditor, is demanding a capital injection of hundreds of millions of shekels before reaching any understanding with Leviev on the matter. Memorand's bank debt is NIS 3.1 billion, backed by personal guarantees from Leviev, his shares in Africa-Israel, and specific external collateral. All the banks are exposed to Leviev.
Published by Globes [online], Israel business news - www.globes-online.com - on November 9, 2009
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