Eleven hours after marathon talks to reach a deal began, Africa Israel on Friday came to an agreement with its bondholders to settle the debts that have plagued the firm in the wake of the global financial crisis.

According to the agreement, the investment firm will issue shares in order to raise 850 million shekels to repay creditors. Lev Leviev, the diamond mogul who heads Africa Israel, will transfer NIS 750 million in order to cover the firm's debts.

Leviev's controlling stake in the company will drop from 75 percent to 52.9 percent.

AFI Developments, which handles Africa Israel Investments' real estate operations in Russia, stumbled earlier this week, as AFI's share price slid 11% on the London Stock Exchange on unusually high turnover.

"We figure that Israelis who own AFI shares are afraid that the day after the debt arrangement is approved, the shares will be worth even less," said a senior investment manager at one of the big pension and provident funds.

The deal reached Friday is awaiting the approval of banks to which Africa Israel owes money. The company's debt is estimated at approximately $5.5 billion.