Securities of Africa-Israel Investments Ltd. (TASE:AFIL) have been the center of attention in the past few days, and today, Clal Finance Ltd. published a recommendation for the company, with an emphasis on its bonds.
Clal Finance analyst Brurit Fein says that the net asset value (NAV) model supports the assessment that Africa-Israel can service its debt in full. "The situation appears to be good, and the market is pricing as if the company's assets exceed its liabilities. Obviously, valuation and cash flow are different things, but the snapshot reflected by the current market cap is fairly encouraging," she writes.
Clal Finance says that Africa-Israel will get through 2014 without any special problems with source of at least NIS 790 million during the year, and that 2015 will depend on the sale of a major asset by the company.
"The company has enough sources to deal with its cash needs over the next two years at least. We believe that the subsequent period is financially challenging, but possible. Africa-Israel will have to sell some prominent assets, or some of its subsidiaries to continue to service its debt in full. Early repayment and refinancing the debt, if carried out, will buy the company time, and it can sell assets without pressure and at optimal prices. The conduct of the company and its controlling shareholder indicate that it means to stand behind its commitments," says Fein.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2013
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