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Restoring the Glory Days

Restoring the glory may take some doing, after Africa Israel reported losing NIS 1.1 billion in the second quarter of 2009.

"I am doing everything I can so the company can return to its glory days," Africa Israel tycoon Lev Leviev told the press yesterday. "It is a very courageous move."

Restoring the glory may take some doing, after Africa Israel reported losing NIS 1.1 billion in the second quarter of 2009.

Africa Israel needs to change its working methods, and provide resources to maximize value for shareholders, Leviev said. "It is time to move from selling to bettering assets. When the crisis passes, we'll want to remain with assets in an advanced stage of construction and improvement. It's time to return to our main strategy - initiation and development."

Meanwhile, the company sees no difficulty meeting its liabilities in 2009 "and apparently in 2010 too," stated Africa Israel CEO Izzy Cohen at the press conference yesterday. The uncertainty sets in from 2011, he said - "It's possible we may have a problem meeting our liabilities starting in 2011."

In the last year Africa Israel had terrific difficulty borrowing, which precluded it from rolling over its loans. Unable to do that or get fresh credit, selling its assets for liquidity became more difficult, Cohen said.

"In parallel with publication of our financial statement [for the second quarter of 2009,] we decided to open discussions with our bondholders," Cohen said.

He stressed that as always, the company is conducting its affairs with complete transparency, responsibility and fairness. "Until now we have met all our liabilities. Even now we want to manage the situation, not get dragged along," he said.

Yet the company's shareholder equity has been badly eroded, he said. "We have to stop this erosion."

As the world found out Africa Israel needed liquidity, it was harder to sell assets for fair prices, Cohen intimated. But the company did its best. It also had to slam the brakes on development projects, which it has.

He's been putting in 20-hour days since the crisis began, Cohen said, as has the rest of Africa Israel's management. "To my great regret, the group hasn't engaged in long-run initiation and development, and core activity, because of the crisis. Africa Israel is a giant, global company with a rich portfolio." But, Cohen added: "There is no doubt that if the property sell-offs continue, the company will be significantly eroded."