Lev Leviev seeks to win back control of indebted property development company Africa Israel Investments, it turns out.
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Late Monday he and Moti Ben-Moshe – the entrepreneur who bought control of the Alon Blue Square holding company – submitted a surprise joint bid for the company. Their offer came just before the Tuesday deadline for buyers to make offers to the bondholders who now control Africa Israel.
The Leviev-Ben-Moshe offer is one of five bids for the property company, and bondholders who hold some 2.8 billion shekels ($730 million) of debt will begin considering the offers over the next several days.
Africa Israel shares surged 19% Tuesday on the news but retreated 4.9% Wednesday to end at 66 agorot each, for a market value of just 135 million shekels.
In fact, shareholders are not expected to get anything out of the bailout and, based on the offers that have been made, bondholders stand to suffer a write-down of between 700 million and 900 million shekels.
Details of the Leviev-Ben-Moshe offer haven’t been made public, but sources said the two were offering to buy 100% of Africa Israel in exchange for injecting 500 million shekels into the company and bondholders’ agreeing to write off 700 million shekels of the debt they are owed. The 500 million would go immediately to paying down the rest of the debt.
Other offers submitted included one from the Brosh Capital investment fund, which offered to inject 1.5 billion shekels into the company and issue 400 million shekels in new three-year bonds to replace existing debt. Brosh doesn’t have all the money it is offering, and market sources said the acquisition would be done with partners. Bondholders would take a 900 million haircut.
A third bid was made by investors led by the Hagag Group, a real estate company that’s offering 800 million shekels in cash and would issue 750 million shekels in new bonds. The U.S. private equity fund Lone Star is offering 500 million shekels in cash, with bondholders taking an 800-million-shekel write-off.
Finally, Jacob Atrakchi is offering two alternatives – 690 million shekels for the company’s Africa Residence units or 760 million for Africa Residences and the construction subsidiary Denya Cebus.