Moti Ben-Moshe: Africa Israel Acquisition Will Go Through Despite U.K. Setback

Israeli-German entrepreneur expresses confidence he will have the 1 billion shekels he needs to complete deal

FILE PHOTO: Moti Ben Moshe speaks at a conference, Tel Aviv, 2014.
Moti Milrod

Israeli-German entrepreneur Moti Ben-Moshe sought on Monday to assure investors that would complete his planned acquisition of Africa Israel Investments despite the collapse of a British energy company he owns.

“With God’s help, we will complete the Africa deal soon, and bondholders need not worry. There is nothing about this occurrence that has any connection to a [debt] arrangement of the company from its creditors,” Ben-Moshe said.

He spoke days after his Extra Energy surprised its 129,000 customers by saying it would cease providing services. The news raised questions about whether Ben-Moshe would be able to pull together the 1 billion shekels ($270 million) he needs to complete his acquisition and bailout of indebted Africa Israel, one of Israel’s largest conglomerates.

In a statement to the media from Ben-Moshe, Extra Energy is said to have reported a loss of 17 million pounds ($21.8 million) in 2017. That is on top of the 13.8 million pounds TheMarker found the company had lost the year before. In order to continue operations, Extra Energy took a loan from another Ben-Moshe, Germany and Cypriot Extra Energy companies. That debt amounted to 105 million euro ($119 million) as of last February.

Ben-Moshe said that, in contrast to his decision to write off the 500 million shekels he lost on his stake in Israel’s IDB group, he would not do the same in the U.K. “We have assets in England of about 100 million euros that we are entitled to,” he said.

He described those assets as credit given to business and household customers. Since Extra Energy has no outstanding bank or other loans, all the repayments will go to the Extra Group, he said.

Bondholders, speaking to TheMarker, said they were concerned but remained confident that the Africa deal would go through.

“Sure we’re worried, but we’re waiting to see if he raises the money and how he does it,” said one bondholder, who spoke on condition of anonymity. “His decision to abandon his U.K. activities could be good for Ben-Moshe’s activities in Israel because he will no longer have to absorb losses in Britain and can focus on his Israeli business.”

Ben-Moshe said Extra Energy Britain ceased operations for reasons connected with local regulatory decisions.

“We told British regulators that in light of significant changes in regulatory rules in England in the area of providing electric power and gas made at the end of October … the group, which operates mainly in the German market, had decided to cease its current operations on the British market,” Ben-Moshe said.

Regarding the Africa Israel acquisition, he said: “All the money that is supposed to be injected into the [debt] agreement is already in Israel. Approval by the Antitrust Authority we’ve already received and we’ve received approval from most European countries,” adding that he expected the rest to come in the next several weeks.

“I hope that we will meet the deadline we’ve set for the accord of December 13,” Ben-Moshe said.

Ben-Moshe said he had raised 300 million shekels of the 1 billion he needs and is in negotiations with parties he described as overseas banks and one Israeli institutional investors about raising the rest. He said he would name them later.