Israeli billionaire agrees to massive debt restructuring

Lev Leviev, the Israeli property and diamond baron whose net fortune has plunged nearly two-thirds from $4.1bn (€2.8bn) in 2007 as per Forbes magazine, last week agreed to the country’s biggest debt restructuring yet, according to a report in the Financial Times.

Israel stocks steady; Discount Bank may face strike

TEL AVIV (MarketWatch) -- Israel stocks were steady on Wednesday, marked by weakness in Teva Pharmaceutical and phone service provider Bezeq as well as some technology stocks, offset by strength in Israel Chemicals as well as a number of the banks and property companies.

Late in the trading day, the Tel Aviv Stock Exchange's benchmark TA-25 Index crept up 0.15% to 1140.09 while the TA-100 Index /quotes/comstock/!ta100 (XX:TA100 1,060, -6.13, -0.57%) edged ahead 0.03% to 1060.40.

The Tel-Tech 15 Index of top technology issues fell 0.43% to 234.43.

And the Real Estate 15 Index added 0.87% to 298.91.

Among the banks, Discount rose 0.9%, Leumi rose 0.4%, Mizrahi Tefahot /quotes/comstock/11i!umzrf (UMZRF 9.37, +0.10, +1.05%) slipped 0.8% and Hapoalim /quotes/comstock/11i!bkhyy (BKHY.Y 19.60, +0.10, +0.51%) added 0.6%

Maoz: Fischer ignored real estate bubble he created

Excellence chief economist Shlomo Maoz expects interest rate to reach higher levels in 2010 than consensus estimates.
Adi Ben-Israel29 Dec 09 12:17
Excellence Investments Ltd. chief economist Shlomo Maoz criticizes Governor of the Bank of Israel Prof. Stanley Fischer's aggressive monetary policy. Fischer yesterday raised the interest rate by 25 basis points to 1.25%, his third such rate hike since August, demonstrating that he is more concerned about inflation than growth.

Maoz has said for months that the 0.5% interest rate earlier this year was inflating asset bubbles, especially in real estate.

H&M store to open in Kfar Saba

The Match Retail and Gazit Globe Israel companies have signed an agreement to open an H&M store in the G shopping mall in Kfar Saba in September 2010. It will be the Swedish fashion chain's fourth branch in Israel.

The store is slated to spread over some 1,300 square meters (14,000 square feet), on the two floors of the shopping center's Fashion Mall section. The contract was signed for a period of 24 years. The rental fee for stores in the Fashion Mall section ranges between $40-80.

H&M's first stores in Israel are expected to open in March 2010 in Tel Aviv's Azrieli Mall, Jerusalem's Malcha Mall and Haifa's Grand Canyon shopping center. The fashion chain is also expected to open stores in the cities of Petah Tikva, Netanya and Rehovot in 2011.

Parent group may buy UK service stations from Delek Real Estate

Yitzhak Tshuva's Delek Group is considering buying 75% of Motorway Service Area from fellow Tshuva company Delek Real Estate. MSA's subsidiaries operate 29 RoadChef roadside service compounds, which contain filling stations, restaurants and hotels, in 20 locales throughout Britain.

Delek Real Estate and Delek Petroleum (a Delek Group company) jointly acquired MSA at the end of March 2007 for 158 million pounds sterling. Delek Real Estate's 75% stake is valued at 118.5 million pounds. MSA has corporate bond debt totaling 175 million pounds, debt that Delek Group would take over if the purchase goes through.

Africa-Israel rises on NY Times building deal

Africa-Israel Investments Ltd., the real-estate holding company owned by Lev Leviev, climbed as much as 8.5 percent in Tel Aviv trading after reorganizing the debt of the former New York Times building in Manhattan.

The shares advanced to as much as NIS 52.20 and rose 2.7% to NIS 49.40 at the close.

A US unit of Africa-Israel relinquished 50% ownership of the building to Five Mile Capital Partners LLC and paid $30 million in cash to creditors in exchange for a reduction in debt on the building to $267m. plus a $75m. credit line from $652m., the company said.

Africa-Israel is struggling to pay obligations after a decline in the US and Russian property markets depressed the value of its real-estate investments. Leviev told investors in August the company needed to restructure about $2 billion of debt.

Tel Aviv District Court on Monday approved a repayment agreement with the Africa-Israel USA settled $236m. of mezzanine debt with a group made up of BlackRock, CIT Lending Services Group, Five Mile Capital and Column Financial; secured a five-year extension of the senior debt; eliminated more than $70m. in guarantees; and transformed the entire project to being off-balance-sheet, it said in a Business Wire statement.

More investors abandoning Lev Leviev and Africa-Israel

Last month, the second-largest Dutch pension fund PFZW joined an already impressive group of investors that have divested from Africa-Israel. Africa-Israel is the target of an international boycott campaign by Palestine solidarity activists because of its involvement in the construction of illegal Israeli settlements in the occupied West Bank.

The negative publicity around Africa-Israel's involvement in the settlements hit at the same time that the global financial crisis led to a depreciation of Africa-Israel's real estate assets and forced its owner, diamond mogul Lev Leviev, to sell 20 percent of his shares in the company. On 30 November, the Israeli business magazine Globes Online reported that the Israeli Bank Hapoalim, Leviev's largest creditor, made a provision of NIS 300 million ($78.8 million) for doubtful debt (debts a creditor does not expect to be paid off) related to Africa-Israel. In addition, Memorand Management Ltd., the private company owned by Leviev, owes Bank Hapoalim NIS 2 billion ($525.5 million).

Yitzhak Tshuva floating Canadian real estate company in Tel Aviv

At a later stage, the new company will be dual-listed for trade under the Elad Canada brand on the Toronto Stock Exchange in Canada.

Elad Group Canada is considered one of the largest and leading real estate companies in Canada, with operations in the provinces of Ontario and Quebec since 1998. The company owns 15 residential rental properties, office buildings, protected housing, commercial space and parks. Four or five of these properties will be transferred to the new company.

Elad Group, Tshuva's private real estate arm in North America and East Asia, finished the third quarter of 2009 with net losses of $18.5 million, an improvement over losses of $44 million in the parallel quarter last year. Most of the losses stemmed from the accounting effects of the devaluation of properties, which have nothing to do with working capital. Third quarter operating profits totaled $24.2 million, compared to operating losses of $24.4 million in the parallel. Elad netted $31.2 in the first nine months of the year, up from $60 million in losses in the parallel period and massive losses of $292 million for all of 2008.

Securities watchdog raids Delek Real Estate offices

Meital has served as active chairman for a year, and was one of the authors of Delek Real Estate's plan to restructure its assets. The plan included selling more than NIS 1 billion worth of properties in Israel and elsewhere, and rescheduling liabilities. However, Delek Real Estate has yet to figure out how to repay bondholders and bankers billions of shekels in the next few years. Delek Real Estate's bonds are trading at junk status of more than 30%, indicating some worry about the company's solvency. Its market capitalization has fallen to NIS 868 million. Delek Real Estate commented that it is cooperating fully with the Israel Securities Authority.