Africa-Israel Investments Ltd. (TASE:AFIL), controlled by chairman Lev Leviev, today announced that it will report a net loss of NIS 710-790 million for the second quarter of 2012, because of a $240 million write-down on assets of its Russian development arm, AFI Development plc (LSE:AFID). Africa-Israel's share price fell 18.8% by midday, following the announcement, to NIS 7.95, giving a market cap of NIS 1 billion.
AFI Development's write-down is due to a preliminary revaluation of four properties under development by Jones Lang LaSalle: the Tverskaya Plaza In and IIa mixed-use complexes, the Bolshaya Pochtovaya mixed-use complex, and the Kostinskaya project, all in Moscow. As a result of the new valuation, combined with the strengthening of the dollar against the ruble, AFI Development will reduce the value of its portfolio from $2.8 billion to $2.4 billion for the second quarter.
"These projects are undergoing a valuation by an independent assessor. The reduction in value is due to changes in municipal planning policies and the development policy by the City of Moscow," said Africa-Israel in a notice to the TASE.
Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2012
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