Africa-Israel Investments Ltd. fell to the lowest level in almost a year after Globes business daily reported that the real estate company owned by businessman Lev Leviev may need to restructure obligations in 2014.
The shares of the company, which in 2010 agreed to a 7.5 billion-shekel ($2.1 billion) debt restructuring and has 49 percent of its assets in the former Soviet Union, dropped 3.4 percent to 6.173 shekels, the lowest level since Sept. 20, at the close in Tel Aviv. The stock has declined this year by 16 percent as the benchmark TA-25 Index has decreased 0.5 percent. The gauge fell 0.9 percent today.
Africa-Israel may need to restructure obligations in 2014, Globes reported, citing an interview with Chief Executive Officer Avraham Noach Novogrocki, who said the company must “act decisively” to meet these payments.
“The article may have created a negative echo around the share,” Shai Azar, a real estate analyst at I.B.I-Israel Brokerage & Investments in Tel Aviv, said by phone. If the company doesn’t sell a significant asset in Russia to meet payments in 2014, “then it will be more difficult to repay debt and the company will have to depend on the sale of U.S. assets and the issue of rights,” he said.
The holding company faces debt payments to bondholders and banks of 531 million shekels in 2014 and of 596 million shekels in 2015, according to an investor presentation filed to the Tel-Aviv Stock Exchange on Aug. 27. The company has been selling assets and offering rights to meet obligations. Africa said in August it will sell a Los Angeles asset for $37.5 million. In April the company said it plans a 219 million-shekels rights offering.
Africa-Israel said it continues to develop new projects as it sells assets to boost company value and increase cash flow for use in the coming years, according to an e-mailed statement to Bloomberg today.