1. Last year, Lev Leviev completed the transition of Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK) to the status of an international company. The name "Africa-Israel" was replaced on every document with "AFI Group", the group's arm which manages its properties in Russia, and which is listed on the London Stock Exchange (LSE), and the controlling shareholder himself, Leviev, moved to one of the UK's most upmarket neighborhoods.
Meanwhile, however, another five of the group's publicly traded subsidiaries, remain on the Tel Aviv Stock Exchange (TASE) along with a good many deals and transactions in the local arena. Although they pale into insignificance in comparison with the massive investment overseas, the saying goes that the worst wheel on the wagon makes the most noise. The trouble is that in an era when many companies are switching their engines off, amid the uncertainty pervading the markets, even the old and familiar sounds suddenly grate a lot more.
2. Erez Meltzer, the former Africa-Israel CEO, used to boast that hardly a day went by without the company issuing an announcement of a new deal somewhere in the world. But in the last ten days, instead of announcing new deals, the group announced the departure of the manager of its income producing properties division, and the VP and human resource manager of its contracting subsidiary Danya Cebus (TASE: DNYA).
At the same time, Danya Cebus also had to provide the Israel Securities Authority with an explanation for its premature announcement of the opening of the first section of Road 431. Africa-Israel Properties (TASE: AFPR), for its part, saw trading in its share suspended yesterday morning, until it issued a clarification on the talks for the sale of its malls.
All these announcements (even the smoothing of corners with the Securities Authority) are without doubt, legitimate, especially for a juggernaut of this size, only Africa-Israel has not even bothered to back them up with some positive noises. With the owner in London ("to be closer to the subsidiary's share"), and a new CEO with precious little real estate experience having only taken up his post last Sunday, there is nothing to stop the other smaller subsidiaries from stirring up too much commotion.
3. This restlessness is also what caused Africa Properties' latest mishap. The subsidiary was initially formed as the group's income producing property arm, operating principally in Europe. With one large mall in Israel (Ramat Aviv), and 3 or four smaller centers, it was obvious that they were just waiting for a serious buyer. A less unsettled company and a slightly less eager Securities Authority would have applied more restraint, until such time as there was any news of substance to report.
4. Another thing should also borne in mind about Leviev. While he chooses to dwell largely on his public businesses (Africa-Israel) when being interviewed, the media has been speculating for years about the value of his private businesses. With real estate no longer the exciting sector it was just a few months back, it should be remembered that Leviev privately owns a string of minerals interests - far more than mere diamond quarrying across the third world.
This is mere speculation, but given that minerals is the hottest sector in the global investment market, it is highly possible that Leviev and his trusted aide, Nadav Grinshpon (Africa Israel deputy chairman and, until this week, acting CEO), have in recent weeks been diverting substantial resources into the minerals business. After all, they know better than anyone that in business it's all a matter of timing. Road 431, the Tel Aviv light railway, the sale of the malls in Israel and even the group's battered stocks can all wait until the markets are in a better frame of mind.
Published by Globes [online], Israel business news - www.globes-online.com - on June 19, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008