Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) is selling 50% of its AFI Hotels subsidiary for NIS 180 million.
Africa-Israel is selling the stake to private investors.
When the deal is completed, Africa-Israel will report a capital gain of NIS 210 million. The sale of AFI Hotels will also greatly reduce Africa-Israel's debt.
After halving its holding in AFI Hotels from 100% to 50%, Africa-Israel will cease consolidating AFI Hotels in its financial statements, which will reduce the debt on its balance sheet by NIS 800 million, and increase its shareholders' equity by NIS 235 million.
The buyer committed to acquire half of the owner's loan that was extended to AFI Hotels for NIS 18 million.
AFI Hotels operates about ten hotels in Israel, including Crowne Plaza hotels and two Holiday Inns.
Africa-Israel shares are up 3%.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2010
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