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Maybe it was a beautiful friendship, but apparently, it's over. Trading in Africa Israel Investments stock was halted on the Tel Aviv Stock Exchange on Sunday after the company made a striking announcement: its 10-year partnership with American developer Shaya Boymelgreen is history.

The development is a significant one for the companies, hence the halt in trading - to give investors a couple of hours to digest the news, and prevent them from reacting hastily.

Africa Israel, owned by diamond and property magnate Lev Leviev, and Boymelgreen remain partners in a number of real estate projects in New York. But that's all, the company clarified.

When entering the partnership, Africa Israel counted on Boymelgreen to lead it to great, sweeping projects in the United States. Africa Israel would provide the body of the financing, and Boymelgreen would serve as the man on the ground monitoring progress, according to the vision.

Indeed, the two companies invested billions in projects in Miami, New York and Las Vegas, some of which have been completed and exited with sizable profit for both partners.

But over the years the Africa Israel management began to feel that Boymelgreen had perhaps bitten off too much and felt let down by his performance.

"The relationship with Leviev was too big for Boymelgreen. When Leviev met him, Shaya was a run-of-the-mill developer and didn't even come close to the magnitude of projects that Leviev and Africa Israel handled," says an affiliate. "Shaya jumped too high and didn't meet the expectations that Africa Israel had of him."

And thus a gradual process of disengagement began, culminating in the Sunday announcement.

However, the divorce is amicable, insists Boymelgreen's associates, and in any case he's walking away with profit in hand. While he won't be operating in Miami any more, he will continue to pursue projects in New York and other areas of the U.S.

Spending billions and needing to borrow

Boymelgreen also began operating extensively in Israel, spending billions in acquiring the controlling interests in the real estate companies Azorim and the Moriah chain of hotels (from Nochi Dankner and Bank Hapoalim), Lagna Holdings (from Jacob Engel), and the Assuta Hospital site in Tel Aviv.

His acquisitions forced him to raise NIS 900 million within a year and some, and the extensive borrowing induced the Maalot rating agency to grant a lackluster A/Negative rating to Azorim's bonds. Some market players whisper that Azorim is on the shelf, and that Bank Mizrahi is pressing Boymelgreen to return some of the loans he took to finance the acquisitions.

Moreover, as TheMarker reported on Sunday, market sources are starting to believe that the much-touted merger between Azorim and Dankner Investment, now owned by energy baron Yitzhak Tshuva, will never happen. A draft agreement was signed in October 2006, but the present conditions make it a bad deal for the Tshuva group, say the sources. Major business interests are sniffing around Dankner Investments, including Shari Arison's Property & Building, and Israeli-Russian business baron Arcadi Gaydamak.

Boymelgreen may yet find salvation in his projects in India and the Far East, not to mention his various works in the U.S. If these projects are brought to maturity and exit, he could use the profits to reduce his debt burden. But a union with Africa Israel won't be his ticket to riches any more.