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The bondholders gave the bid, which includes a NIS 1 billion injection by Saidoff, a cold reception.
At the end of last week, representatives of the Africa-Israel Investments Ltd. (TASE:AFIL) bondholders and the trustee for the company’s bond series, Hermetic Trust Services, received another bid to acquire full ownership of Africa Israel in the framework of a settlement with the bondholders. The bid, submitted by Shayma Investments, a company controlled by Israeli-American Ofer Saidoff, involves a 50% write-down on the bonds, and for that reason has apparently drawn no response from the bondholders’ representatives so far. A representative of one of the major Africa-Israel bondholders said today, “The offer does not look interesting, and is not worth wasting time on.”
Ofer Saidoff is the brother of diamond trader and real estate investor Naty Saidoff. Ofer recently made a bid through Shayma to acquire control of Jerusalem Economy Ltd. (TASE:ECJM) (JEC), but the bid was canceled after it received no response from the company’s existing shareholders. The current bid, submitted on Thursday, stated that Shayma would inject NIS 1 billion into Africa-Israel for an allocation of new shares in the company constituting 100% of its capital. The company would become a private one fully owned by Shayma (the existing shares would be canceled without compensation for the existing shareholders). The entire NIS 1 billion to be injected by Shayma will be used to repay 37.5% of Africa-Israel’s NIS 2.8 billion debt to its bondholders. Shayma said that NIS 1.4 billion of the remaining NIS 1.8 debt would be written off completely, while the company would continue to service only NIS 400 million for the bondholders at 5% annual interest.
The validity of the bid is contingent on its acceptance by the bondholders by this Thursday.
US fund Westport Capital Partners last week submitted a bid for full ownership of Africa-Israel in the framework of a bond arrangement involving a 25% write-down for the bondholders. Westport offered to inject NIS 500 million into Africa Israel to repay its debt to the bondholders in exchange for their agreement to write off NIS 700 million of the debt. Following this arrangement, NIS 1.6 billion in debt will remain, bearing 5% annual interest.
Westport’s bid also involves receiving full ownership of Africa-Israel, with the cancellation of the existing shares and the issuing of 500 million new shares for Westport in exchange for the capital to be injected by Westport. The bid also included an agreement to grant the bondholders an option to benefit from Africa-Israel’s recovery through the granting of rights to convert NIS 150 million of the outstanding debt to 23% of the new shares in the company. After this bid was submitted, Westport’s executives attended a bondholders’ meeting and tried to persuade them that the offer was worthwhile. The dominant bondholders, however, currently believe that the sale of Africa-Israel’s assets will result in larger proceeds and a smaller write-off (if any) than the ones proposed by Westport and Shayma.
Published by Globes [online], Israel business news – www.globes-online.com – on November 20, 2016
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