19th Jul 2016 15:19
LONDON (Alliance News) - AFI Development PLC on Tuesday said it is seeking further information in regard to the sale of its controlling shareholder Africa Israel Investments Ltd's holdings in securities of AFI to AFI Executive Chairman Lev Leviev.
Following a notice from VTB Bank PJSC warning AFI of the potential acceleration of repayment on two outstanding loans to VTB and a failure to reach an understanding with VTB, Africa Israel concluded that there was a great deal of uncertainty over its ability to meet its financial obligations. As a result it decided there was a need to restructure its financial obligations with its bondholders.
Africa Israel and Leviev have been in talks over the terms of a possible debt arrangement with the trustees for the Africa Israel debentures, and were considering a framework under which Leviev would acquire Africa Israel's entire holdings in the securities of AFI, which equates to a 64.9% stake in the company.
Leviev would purchase the holding for ILS550 million and provide VTB with a personal guarantee. The completion of this deal requires the approval of the Africa Israel bondholders and approval from the Tel Aviv District Court.
Leviev, in turn, would grant Africa Israel a call option to purchase from him AFI securities of up to 10% of AFI's issued share capital throughout a period of three years, at a price reflecting 130% of the price he will pay under the purchase agreement.
AFI said it is seeking further information on the process of this agreement. Its current understanding is that this process is ongoing but that there is no certainty this will result in a binding transaction.
Shares in AFI were up 7.0% at 0.172 pence near the close Tuesday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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