Lev Leviev's Africa-Israel Investments Ltd. (TASE:AFIL) and its partners have denied reports that they have lost control of the Apthorp condominium building on Manhattan's Upper West Side to mezzanine lender Area Property Partners. Previously, "The Real Deal" had reported that Irish Bank Resolution Corporation, a government company that took over Anglo Irish Bank, sold the Apthorp’s mortgage debt to Area Property Partners affiliate Arefin US Investment on August 10. This according to documents filed with New York Attorney General Eric Schneiderman. The $385 million mortgage debt had a balance of $225 million at the end of 2011.
But Africa-Israel responded, "On August 10 AFI USA completed refinancing the loan taken on the Apthorp project. As part of the refinancing the original loan taken from Anglo Irish was passed onto Area and other financial bodies to the project. In addition, guarantees were cancelled that were given by Africa-Israel as part of the debt. Area was given other rights to manage the asset."
The statement continued, "AFI USA and its partners in the asset continue to each hold 50% and the refinancing has not changed the holdings."
"The Real Deal" had previously reported that as part of the loan sale, a new $125 million loan was issued by Australia’s Macquarie Bank Ltd., and a new $60 million senior mezzanine loan was issued by Macquarie and Arefin. The senior mortgage will mature in August 2014, while $99.7 million of senior mezzanine loans are due by 2016 and $62 million in junior mezzanine debt by 2017.
Africa-Israel owned the Apthorp through subsidiary Africa-Israel USA, and the company's representatives, AFI USA chairman Tamir Kazaz, former Africa-Israel CEO Izzy Cohen have resigned from the Apthorp's board.
Africa-Israel and Maurice Mann acquired the Apthorp in 2007 for a record $426 million, which was the single largest price for a residential U.S. building on a per unit basis, and Africa-Israel took it over after bitter legal fight with Mann two years later. According to "The Real Deal", only 50 apartments of the 163-unit, 422,000-square-foot property, have sold been sold to date.
Africa-Israel subsequently faced new legal problems, after Anglo Irish Bank threatened to sell the mortgage in a massive $9.5 billion fire sale of its entire US portfolio. "The Real Deal" reported that the Apthorp owners filed false documents with the New York Attorney General, claiming that the loan sale would have no affect on the project, but then sued Anglo Irish Bank in September 2011, alleging that a loan sale would potentially cripple the project.
Schneiderman forced Africa-Israel to temporarily halt sales, fined the Apthorp's owners and ordered them to offer refunds to buyers under contract. Anglo Irish Bank subsequently obtained permission the New York State Supreme Court to sell the mortgage debt, a process that took months.
Africa-Israel's share price fell another 2.9% today to NIS 7.77, giving a market cap of NIS 1.06 billion, after falling 18% yesterday after publishing a profit warning.
Published by Globes [online], Israel business news - www.globes-online.com - on August 14, 2012
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