At the end of marathon talks overnight Thursday, Africa Israel Investments Ltd. came to an agreement with bondholders to settle the debts of the beleaguered company owned by diamond mogul Lev Leviev.
According to the deal signed in the wee hours of Friday morning, the holding and investment company will issue shares in order to raise NIS 850 million, from which Leviev will transfer NIS 750 million in order to cover the firm's debts to creditors.
The company was valued at NIS 2 billion for the sake of the settlement.
Leviev will retain control of the firm, but his stake will drop to 52 percent.
The remainder of the company's debts will be settled by means of spreading out loan repayments and converting bonds to shares.
The deal is pending the approval of the banks to which Africa Israel owes money.
The company has lost some $1.4 billion since the beginning of 2008, battered in large part by soured real-estate investments in the US and Russia.
The company's debt currently totals some $5.5 billion.
AP contributed to this report