Israeli banks are growing increasingly fearful that Lev Leviev’s Africa-Israel–owner of the old New York Times building and other New York City trophies–will be unable to repay the more the $4 billion (or 14 billion shekels) he’s taken in short- and long-term loans, according to an article in today’s Haaretz:
“Lev Leviev’s Africa Israel Investments owes Israel’s banks more than NIS 14 billion in long-term and short-term liabilities, and the bankers are evidently growing nervous about the huge amount. Within days the two biggest lenders, Hapoalim and Leumi, are expected to receive rights to yet more shares in the Africa Israel parent company to secure the debts.”
So nervous are Israeli banks Leumi and Hapoalim, given Mr. Leviev’s exposure to the seizing markets in the States and Russia, that, according to Haaretz, “Leviev is being asked to buttress the securities backing loans to his group by giving the banks liens on an addition 10%-20% of Africa Israel’s shares. …Following the increase, the banks will have attachments to 75%-80% of Africa Israel’s stock. Bank Hapoalim has rights to more than 50% of Africa Israel’s stock. Most of the rest of the attachments belong to Bank Leumi.”
Africa-Israel is a significant landlord in New York City. Not only does the firm own the former Times headquarters at 229 West 43rd Street, but it’s also converting the Clock Tower at 5 Madison Avenue into 55 Versace-designed condo units.
It’s reasonable to assume that Mr. Leviev is looking for more investors, though given the recent Wall Street meltdown, they’re presumably hard to come by. Earlier this year, Mr. Leviev got a $200 million cash infusion from a mysterious “Far East” investor in exchange for a 49.9 percent stake in the old Times building, the Clock Tower, and 15 Broad Street.