Business in Brief: Extell Bonds Rise After Securing New $500m Loan

Africa Israel CEO stepping down ■ Delek in NIS 500m internal asset swap ■ Banks give end-of-the-day boost to shares

An Extell Development Company project in Manhattan.
Bloomberg

Extell bonds rise after securing new loan

Extell Development Company, a New York real estate company, said Thursday it secured $500 million in critical financing from JPMorgan Chase & Co., sending its Tel Aviv Stock Exchange-traded bonds higher. Extell, which is controlled by Gary Barnett, owes Israeli bondholders repayments of 610 million shekels ($167.7 million) this year and 585 million in 2019, but with slowing sales of luxury apartments in New York, bondholders were concerned, and Extell bonds moved into “junk” territory over the last year. Some $330 million of the new loan will be used to roll over existing debt and another $98.5 million will serve as a credit line. It will enable the company to pull money out of deposits now being used as collateral for debt due to be repaid and free up some $66.7 million in cash, the company said. Four Extell properties will serve as collateral for the JPMorgan loan. Extell bonds closed up 7% higher to a yield of 11.6%. (Eran Azran)

Africa Israel CEO stepping down 

After six years on the job, Avraham Novogrocki resigned as CEO of Africa Israel Investments Thursday, just before control of the property company moves to Moti Ben-Moshe. Novogrocki had previous been CEO of the company’s Africa Israel Industries unit from 2008 and before that CEO of Packer Steel, an Africa Industries unit. Two weeks ago the bondholders who engineered a debt restructuring and the transfer of control of the company from Lev Leviev to Ben-Moshe refused to approve 1 million shekels ($270,000) in bonuses for Africa Israel’s top five executives. Novogrocki would have received one-third of that. Chief Financial Officer Ronit Cohen-Nissan, another member of the top five, quit last week. Novogrocki will be the second CEO lost to Ben-Moshe after Zeev Stein, who has headed Ben-Moshe’s Blue Square Investments since 2006, said he would step down later this year. Africa Israel shares ended up 2.2% at 14 agorot. (Jasmin Geuta)

Delek in NIS 500m internal asset swap 

In a move designed to make more cash available to it, Yitzhak Tshuva’s holding company Delek Group said Thursday that two of its wholly owned subsidiaries had reached a deal between themselves worth over 500 million shekels ($137.5 million). Delek Power Stations agreed to sell all its assets — which include the Askhelon and Soreq, generating plants — to Delek Israel, another wholly owned unit, for 474 million shekels.  Payment will be in the form of a shareholders’ loan, a capital note and shares as well as 56 million in cash contingent on certain conditions. The deal will in effect bring cash higher up into the Delek corporate pyramid, enabling Delek Group to continue paying its generous dividends and make energy investments in its Ithaca unit and elsewhere. It also has $6 billion in debt to service and major repayments coming due in the second half of 2019. Shares of Delek finished down 0.04% at 538.60 shekels. (Eran Azran)

Banks give end-of-the-day boost to shares

Tel Aviv shares ended sharply higher Thursday after bank shares rallied in the final hour of trading. The TA-35 and TA-125 indexes both finished up 1% at 1,634.02 and 14.68.71 points, respectively. Turnover was 1.42 billion shekels ($390 million). Mizrahi Tefahot paced banking gains, climbing 3.15% to close at 66.55 shekels. Hapoalim rose 2.7% to 26.04 and Leumi 2% to 24. Earnings also lifted shares: Alony Hetz rose 1.35% to 36.75 after reporting a 43% boost to second-quarter net to 171 million, and Maytronics soared 10.6% to 21.80 on a 33% increase to 61 million shekels. Ravad climbed 15.4% by close to 7.20. Igal Ahouvi and Zvi Biran agreed to sell control of the property company to an investor group led by Yuval Cohen for 8.40 shekels a share. On the losing side, Teva Pharmaceuticals finished 1.55% down at 87.90 shekels, extending a drop of 3.5% Wednesday. (Michael Rochvarger and Eran Azran)