Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK) has completed the flotation on the London Stock Exchange of AFI Development. AFI Development holds the group's real estate activity in Russia. In the initial public offering, 100 million global depositary receipts (GDR) were issued at $14 each, above the target price range of $10-13.
The company raised a total of $1.4 billion, representing 19.2% of its share capital. The amount raised gives the company a market cap of $7.3 billion. The underwriters have an option on 10 million more shares.
Conditional trading in the GDRs on the London Stock Exchange is expected to commence on a ‘‘when and if issued’’ basis today, and on an unconditional basis on May 11, under the symbol AFID.
AFI Development said it intended to use the proceeds from the offering to fund its current project portfolio and to acquire new pipeline projects in Moscow, the Moscow region, and other major cities in Russia.
After the offering, and before any exercise of the over-allotment option, the company’s shareholders will comprise Africa Israel Investments Ltd. (approximately 71% shareholding), Nirro Group SA, a company controlled by Alexander Khaldey, a director of AFI Development and CEO of Stroyinkom-K, the company’s Russian operating subsidiary (approximately 10% shareholding), and a free float of approximately 19%. Africa Israel Investments Ltd. and Nirro Group are not selling any shares of the company in connection with this offering.
The joint global co-ordinators for the global offering are Deutsche Bank and Morgan Stanley, and the joint bookrunners are Deutsche Bank, Goldman Sachs International and Morgan Stanley. The syndicate also includes Citi as co-lead manager.
Africa-Israel chairman Lev Leviev and CEO Erez Meltzer sounded pleased this morning from AFI Development’s results. Leviev said, “I welcome this unprecedented successful IPO. This is the largest IPO ever by an Israeli company overseas. It’s a vote of confidence by the international markets in Africa-Israel in general and in AFI Development in particular. I thank the management team and the employees who have worked hard since the company was founded in Russia.”
AFI Development chairman Erez Meltzer said, “We are delighted that the combination of our proven track record, our experienced local management team and our high profile property portfolio has attracted strong support from investors.”
Published by Globes [online], Israel business news - www.globes.co.il - on May 3, 2007
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