Africa Israel, bondholders remain far apart on debt relief
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Africa Israel Investments and its bondholders remain far apart about debt relief for the financially troubled property developer.
Sources close to the talks over the company’s 3.1-billion-shekel ($800 million) debt say bondholders have offered two alternatives. The first would erase 900 million shekels of the debt; in exchange, controlling shareholder Lev Leviev would inject 600 million shekels into the company. Under the second, the debt would be converted into a 55% equity stake, leaving Leviev with 45%. Leviev is offering a cash injection of 300 million shekels in return for forgiveness of 1.5 billion shekels of the debt.
Bondholders are exploring a partial liquidation, in which Leviev would pay several hundred million dollars for the company’s troubled Russian property portfolio, now mostly held by Africa Israel’s AFI Development unit. That would leave Africa Israel with its Israel and other global operations. The sources said Leviev flatly rejected that option, although he is interested in hearing how much he would be expected to pay for AFI. (Ruti Levy)
Teva ends collaboration with Mesoblast
Teva Pharmaceuticals is expected to take a $258-million write-down after it withdrew on Monday from cooperation with Australia’s Mesoblast in developing a stem cell therapy for advanced chronic heart failure. Teva held about 60% of the rights to the therapy, called Revascor, and still holds a 14.6% stake in the company. It acquired both when it bought Cephalon in 2011. As well as writing off its investment it made in the treatment, Teva will also have to write down part of its investment in Mesoblast, whose market capitalization dropped to just $5 million on Tuesday, compared to $75 million on Teva’s books.
Mesoblast said it expected to go ahead with the drug’s development and complete its Phase III trial next year. Mesoblast said it has the financing to complete the clinical trial, but will seek a large company partner to help sell the treatment, if it is approved. Shares of Teva ended 0.1% higher at 207.50 shekels ($53.56). (Yoram Gabison)
TA-25 index marks fourth session of declines
The Tel Aviv Stock Exchange’s TA-25 index marked its fourth session of losses on Tuesday as European and Asian shares fell amid concerns about next week’s referendum in Britain on membership of the European Union and a two-day meeting of the Federal Reserve starting later in the day.
Trading was unusually heavy; turnover reached 4.25 billion shekels ($1.1 billion), nearly four times the recent average. The TA-25 index didn’t move much, closing down less than 0.2% at 1,410.99 points. The TA-100 index lost 0.3% to end at 1,226.41 points.
Perrigo was the most active share of the day, with 759 million shekels changing hands, on a gain of 1.15% to 387 shekels. Biotech and technology shares led declines while banks and real-estate companies were generally higher. SodaStream dropped 4.7% to 80.65 while Opko Health lost 4.5% to 35.23. In foreign currency trading, the euro weakened more than 0.7% to a Bank of Israel rate of 4.353. (Omri Zerachovitz)