Africa Israel Investments

Africa Israel Investments Ltd.(AFI Group) is an internationalholdingandinvestment companybased inYehud,Israel.The group consists of several private and public companies active in areas such as real estate, construction, infrastructure, manufacturing, tourism and leisure. The company’s shares are traded on theTel Aviv Stock Exchangeand are a constitute of theTA-35 Index.The company became the subject of newspaper coverage in 2008, for its association with the construction ofIsraeli settlementson theWest Bank.

Africa Israel Investments Ltd.
Company typePublic
TASE:AFIL
IndustryHolding&Investment
Founded1934;90 years ago(1934)
HeadquartersYehud,Israel
Key people
Lev Leviev,Chairman of the Board
Shaul Gliksberg, CFO
Websitewww.africa-israel

History

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Early years

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Africa Israel Investments was founded in 1934, during theBritish Mandate,by Jewish investors from South Africa who wanted to support development in the local economy of theYishuv.After the establishment of the state ofIsraelthe company expanded its commercial and financial activities and was one of the first companies in the country whose shares were traded on theTel Aviv Stock Exchange.In the early 1970s control of the company was acquired byBank Leumi.From 1978 to 1996Shlomo Grofmanserved as President andCEOof the company. In early 1997,Lev Levievacquired control of the company and Grofman left.

Acquisition by Lev Leviev

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In November 1996, thediamond cutterand diamond merchantLev Levievacquired control fromBank Leumi;[1]he soon expanded the group’s activities into new markets and territories. Including: energy – Dor-Alon in Israel, US and Europe. Real Estate – AFI development, Russia, USA and Europe. Manufacturing – AFI Industries (by acquiring Packer Plada).

Debt restructuring

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Following thefinancial crisis of 2007–2008,the company was hurt by the drop of real estate values in the United States, Russia and eastern Europe. It defaulted on a series of bonds and in 2010 it restructured 7.4 billionshekelsof debt.[2]

In 2016, the company sought a second debt settlement. In a recorded conversation that was leaked toIsrael Channel 10 News,Lev Leviev is heard saying: "I shit on every bank, but they haven't been able to make me move a centimeter because I don't owe any of them money, to no bank in the world. I piss on every bank from above, even Rakefet" (referring toBank LeumiCEO Rakefet Russak-Aminoach).[3]

Controversy

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The company became the subject of newspaper coverage in 2008, for Leviev's association with the construction of Israeli settlements on theWest Bank.The British Embassy in Israel was planning to move into theKirya Tower,one of its buildings, but cancelled when these ties were revealed in the British media.[4]

In September 2009, Leviev's empire was on the verge of collapse. During the real estate bubble of the early 2000s, he had borrowed huge sums of money to acquire property around the world, including America. As American real estate prices plummeted and market values declined to less than half of what Leviev had paid for properties, so did the value of Africa Israel investments. Leviev said: "Our main mistake was the investments in the U.S."[5]

In 2009, Africa Israel's recently constructed private prison nearBeershebawas banned by Israel's High Court of Justice. The prison had not yet been occupied when it was declared unconstitutional.[6]

In 2009,BlackRockdivested from the company, allegedly "due to firm's involvement in West Bank settlement construction."[7]

Following campaigning by theBoycott, Divestment and Sanctionsmovement, in January 2010Danske Bankadded Africa Israel to the list of companies that fail its Socially Responsible Investment policy; a bank spokesman noted that it was acting in the interests of its customers by not 'placing their money in companies that violate international standards'.[8]In October 2011, Africa Israel sold theMetropolitan Life Insurance Company Towerfor US$165 million, increasing its cash flow by $88 million.[9]In the third quarter 2011, Africa Israel made a NIS 148 million profit. The company recorded net gains in real estate investment for the first nine months of 2011 in the amount of NIS 712 million ($188 million), of which NIS 599 million ($159 million) were recorded in the third quarter.[10]

On 30 January 2014, theGovernment Pension Fund of Norwayexcluded Africa Israel Investments from its portfolio, citing "Serious violations of individuals' rights in situations of war or conflict."[11]

On 17 November 2014, the Cypriot AFI Development Plc, which did not file its 2012 financial results indicator report and delayed filing its 2013 financial results indicator until March 18, 2014, was fined by the Cyprus SEC for lack of transparency a violation of the section 13 (1) Law.[12]

Major holdings

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Real estate

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  • AFI Development PlcLSE:AFI– Russia: A public company traded in theLondon Stock Exchange.Founded in 2001, this company is one of the largest real estate developments companies in Russia, focusing on large scale projects inMoscowand other main cities in Russia in the residential, offices, shopping malls, hotels and infrastructure sectors, such as theMall of Russiaand the Tverskaya Zastava site.
  • AFI USA:Established in 2002, the company focuses on exclusive residential projects, income producing properties and hotels. The company is active in New York where it ownsThe Apthorpresidential building and formerly229 West 43rd Street.It is moreover active in Miami, Los Angeles and Phoenix, and was a partner in theHard Rock amusement parkin Myrtle Beach, South Carolina (permanently closed) and holds building rights for a mega project in Las Vegas.
  • AFI Europe:The company has been coordinating the group’s activities in Europe since 1998. It owns residential, office and shopping mall projects in the Czech Republic, Serbia, Bulgaria, Romania, Poland, Hungary, Germany and Latvia. Among its outstanding assets is the "Palace Flora" mall in Prague and it is building the "Cotroceni Park" in Bucharest, which upon its completion will become the largest mall in Romania. Cotroceni Park opened on 29 October 2009, as the "AFI Palace Cotroceni".
  • Africa Israel Residences Ltd.:TASE:AFREA public company traded on theTel Aviv Stock Exchangeoperating in Israel under the “Savionim” brand name, Africa Israel develops entire neighborhoods including shopping centers, schools, green areas, cultural and sports facilities.
  • AFI Properties Ltd.:TASE:AFPRA public company traded on theTel Aviv Stock Exchangeholding shopping centers and office buildings.

Construction and infrastructures

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Danya CebusTASE:DNYAis the construction and infrastructures arm of Africa Israel, listed on theTel Aviv Stock Exchange.Danya Cebus is involved in major infrastructure projects in Israel, Russia, Romania and North America.

BOT&PFIProjects:Africa Israel owns 37.5% of the company operating theCross-Israel Highway(Highway 6), Israel’s first toll road. Other BOT and PFI activities includeHighway 431,Israel's first private penitentiary, student dormitories at theHebrew Universityand theTel Aviv Light Rail.

Energy and food retail

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Alon Group:Consists of Dor Alon OilTASE:DRAL,Israel's largest international energy group;Alon USA Energy, Inc.NYSE:ALJwhich operates the Big Spring refinery, 1,700 FINA gas stations in several states, terminals, more than 1,850 miles of oil pipelines, asphalt factories and more than 170 7-Eleven convenience stores. Dor Energy: A national network of gas stations and Super Alonit convenience stores in Israel, controlling also Blue Square, Israel's second largest supermarket chain.

Industry

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AFI Industries:Africa Israel holds a major interest in AFI Industries (formerly Packer Plada), Israel’s largest steel company and Negev Ceramics, the country’s leading company in design and manufacture of building and interior design ceramic products. AFI Industries is also active in Russia and intends to expand its activities to additional countries.

Tourism and leisure

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Africa Israel Hotelsholds the Crowne Plaza and Holiday Inn franchise in Israel, operates 10 hotels in Israel (2,250 rooms) a Spa Hotel in Kislovodsk, Russia (400 rooms), a hotel in Germany, and 3 hotels in Bucharest, Romania, and is expanding its operations in Europe. It also holds and operates an amusement park in Eilat, Israel.

Fashion

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The company's fashion Brands includeGottex,Gideon Oberson, Christina (Canada) and other beachwear international brands, and theZaraand Pull & Bear franchises in Israel.

Lev Leviev and the Africa-Israel Group acquired Gottex in 1997, from its founder and chief designerLea Gottlieb.[13]After about a year heading the design team, Gottlieb left the company.[14][15][16]

Communications and media

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The company has a controlling stake inTadiran Telecomwhich develops telecom solutions and inChannel 9 (Israel),a TV station serving Russian speakers.

Recent disposals

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  • In June 2009, Africa Israel Group sold its 50 percent stake in the Gottex swimwear firm to its joint venture partners for 44 million shekel (US$11.3 million).[17]
  • In March 2009, Africa Israel Properties sold its stakes in two shopping centres in the Tel Aviv area to Melisron LtdTASE:MLSR,a company controlled by theOfer Brothers Group.[18]

See also

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References

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  1. ^Strasler, Nehemia."The Ayatollah of Ramat Aviv".The Jerusalem Post.March 5, 1997.
  2. ^Africa Israel board approves debt restructuring plan,Reuters8 Feb 2010
  3. ^Rochvarger, Michael (April 4, 2016)."Africa Israel Chief: I Piss on Banks From Above".Haaretz.Retrieved2024-01-29.
  4. ^MacIntyre, Donald (20 September 2008)."Fury over British embassy link to Jewish settlement-builder".The Independent.London.Archivedfrom the original on 2008-09-23.Retrieved2008-09-21.
  5. ^Africa-Israel stock plummetsArchived2009-09-05 at theWayback Machine
  6. ^"International Legal Precedent: No Private Prisons in Israel".Haaretz.
  7. ^BlackRock divests from Africa-Israel allegedly due to firm's involvement in West Bank settlement construction
  8. ^"Israeli companies excluded from bank's investments".Copenhagen Post. 2010-01-25. Archived fromthe originalon 2010-01-31.Retrieved2010-03-01.
  9. ^Africa-Israel sells Manhattan's Clock Tower for $165mArchivedOctober 17, 2011, at theWayback Machine16 October 11 10:24, Globes' correspondent
  10. ^Africa Israel posts NIS 148M net profitShay Salinas, Calcalist Published: 29 November 2011
  11. ^OBSERVATION AND EXCLUSION OF COMPANIES,NIMB
  12. ^"18Απριλίου2015Απόφαση Συμβουλίου ΕΚΚ"[April 18, 2015 ECSC Council Decision] (in Greek). Cyprus Securities and Exchange Commission. April 18, 2015. p. 2.RetrievedDecember 9,2019.
  13. ^Mari Davis; Tom Massey; Boyd Davis (September 9, 2006)."Gottex, Fashion Designer".Fashion Windows. Archived fromthe originalon July 26, 2011.RetrievedJuly 28,2011.
  14. ^Greer Fay Cashman (April 15, 2005)."Grapevine".The Jerusalem Post.Archived fromthe originalon November 7, 2012.RetrievedJuly 28,2011.
  15. ^Greer Fay Cashman (May 17, 2006)."Making a splash".The Jerusalem Post.Archived fromthe originalon November 7, 2012.RetrievedJuly 28,2011.
  16. ^Orit Arfa (February 20, 2007)."Designing woman".The Jerusalem Post.Archived fromthe originalon January 31, 2013.RetrievedJuly 28,2011.
  17. ^Africa Israel nears completion of Gottex sale,Reuters, 2009-06-02,retrieved2009-10-11
  18. ^Africa Israel sells two malls to Melisron,Reuters, 2009-04-07, archived fromthe originalon February 2, 2013,retrieved2009-10-11
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