Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK), controlled by chairman Lev Leviev, has signed an memorandum of understanding (MOU) with Boymelgreen Developers LLC, owned by Shaya Boymelgreen, regarding the companies’ joint venture in the US, Leviev Boymelgreen and its various projects. Africa-Israel owns 65% of Leviev Boymelgreen and Boymelgreen Developers owns 35%, under an agreement from April 2002.
Under the new agreement, Leviev Boymelgreen will continue development of the 84 Front Street, 15 Broad Street, and 85 Adams Street projects, on the original terms of the partnership, and will continue the 20 Pine Street project under 50/50 ownership. All these projects are in New York City. Africa-Israel and Boymelgreen Developers can sell their shares in these projects to a third party subject to tag-along or drag-along rights. Proceeds from these projects will first go to repaying their bank loans, then repayment of loans to Africa-Israel, repayment of the companies’ shareholders’ equity investments in the projects, payment of management fees to Boymelgreen Developers, and finally, payment of the balance to Africa-Israel and Boymelgreen Developers on the basis of their stakes in the projects.
Boymelgreen Developers will transfer to Africa-Israel its rights in the joint ventures in New York: the 23 Wall Street project, the commercial part of the 15 Broad Street project, Gowanus Village, 88 Leonard Street, and the commercial and parking parts of the W Squared project. Boymelgreen Developers will also transfer to Africa-Israel all joint ventures in Miami.
In exchange, Africa-Israel will transfer to Boymelgreen Developers all its rights in the following projects in New York: Atlantic Court; 10 Chelsea, Beachfront Community, and the commercial parts of the 84 Front Street and 85 Adams Street projects.
Africa-Israel said that any additional financing in the remaining joint projects would be made on the basis of the two companies’ shares in them.
Africa-Israel said that following the exchange of properties in this agreement, its commitments in the projects transferred to Boymelgreen Developers, booked at a value of $4.7 million, have ended, and its commitments to the financial institutions for the projects it has taken over in full total $408.3 million. Since Africa-Israel already owned 65% of these projects, the added commitment totals about $142.4 million.
Africa-Israel has already bought out Boymelgreen Developers in their joint projects in Las Vegas.
Published by Globes [online], Israel business news - www.globes.co.il - on July 29, 2007
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