Africa-Israel Group, the Tel-Aviv listed conglomerate headed by Israeli billionaire Lev Leviev, has confirmed it intends to press ahead with the flotation of its Russian unit, AFI Development unit, on London's main market. The details for the offering to international institutional and professional investors have yet to be finalised.
Africa-Israel Group, the Tel-Aviv listed conglomerate headed by Israeli billionaire Lev Leviev, has confirmed it intends to press ahead with the flotation of its Russian unit, AFI Development unit, on London's main market. The details for the offering to international institutional and professional investors have yet to be finalised.
AFI Development's portfolio has been provisionally valued by property advisor Jones Lang LaSalle at $3.8 bn (EUR 2.8 bn). Africa Israel has a 88% interest in AFI Development, while Alexander Khaldey, ceo of AFI Development, holds the rest through his Nirro Group. The funds raised by the IPO, signalled by PropertyEU on February 26, will be used to fund the company's development pipeline, as well as to acquire new developments in Moscow, the Moscow region and other major Russian cities.
Deutsche Bank and Morgan Stanley are the joint global coordinators for the offering, while the two institutions and Goldman Sachs International have been appointed as joint bookrunners. Citigroup is acting as co-lead manager for the offering.
AFI Development, which operates through its management company Stroyinkom-K, focuses on developing commercial and residential assets solely in Russia. It began operating in 2001 and at present owns 21 projects that should provide 2,787,091 m2 of space once completed by 2012. In February 2007, its subsidiary made several acquisitions of land in Russia, accounting for $300 mln. The company is planning to develop some 200,000 m2 of office, residential and commercial property on the sites. A the end of last year, Africa-Israel increased its stake in Stroicom from 80-% to 88% in preparation for a possible share offer.
The news on the IPO was announced during a conference call on Africa-Israel's fourth quarter and year-end 2006 results. Erez Meltzer, ceo of Africa-Israel, said the company had an excellent 2006, with a year-on-year growth of 21% in asset value to NIS 19 bn (EUR 3.4 bn). Net profit came to NIS 844 mln, up 30% on NIS 649 mln in 2005.
