Africa-Israel Investments Ltd. rose the most in more than a year as the company with interests in real estate reached an agreement with representatives of three bondholder groups on debt restructuring.
The shares climbed the most since September 2008, surging 24 percent to NIS 53.17 at the close in Tel Aviv.
"It's a new era for Africa Israel," said Shay Lipman, an analyst at Israel Brokerage & Investments Ltd. in Tel Aviv.
While the company "will still have difficulties to deal with, such as in the US and Russia, with a settlement in place, the company will be able to focus on its actual business activity."
Africa-Israel is struggling to repay debt after a decline in the US and Russian property markets depressed the value of its real-estate investments. Fifty-three year-old Chairman Lev Leviev told investors in August the company needed to restructure about $2 billion of debt.
On Sunday Africa Israel submitted to the Tel Aviv District Court a shareholder agreement and Judge Varda Alshech will likely deliver her decision on the accord tomorrow, the company said.
Under Sunday's agreement, bondholders will
receive Africa- Israel shares, stock of a subsidiary, short- and long-term bonds and cash. Holders of Series Tet bonds, which were due last month, will be eligible to get 45% in cash and the rest according to the general debt settlement. Holders of bonds due in 2010 will receive 34% in cash.
Longer-term bondholders will be compensated by adding NIS 76 million to their combined package.
Africa-Israel's agreement with 12 of 13 series of bondholders reached on October 30 had called for NIS 550m. in cash to be evenly distributed among all the bond series. Tet holders rejected that agreement, wanting a higher proportion of cash because their bonds were due in November.
Holders of bonds with maturities in 2010 also opposed the deal.
"There will basically be two debt series, one long-term and one short-term, and hopefully the company will be able to repay both," Lipman said. (Bloomberg)