Wednesday, December 16, 2009
Israel Billionaire Leviev Mired in New York Property
Israeli billionaire Lev Leviev told a roomful of reporters in August at the beachside Tel Aviv Crowne Plaza hotel he owns that his Africa-Israel Investments Ltd. would seek to restructure about $2 billion of debt.
“Our biggest mistake was our investments in the U.S.,” said the diamond mogul turned real estate investor, who just two years earlier was ranked by the Israeli newspaper TheMarker as the country’s richest man. The revelation, in Leviev’s Russian- accented Hebrew, rocked Israel’s markets, sending its benchmark stock index to its biggest drop since June.
Leviev, 53, born in Soviet Uzbekistan, went from success to success in the decade before the credit crisis. He made his fortune as owner of the world’s largest cutter and polisher of diamonds before turning Africa-Israel into a multibillion-dollar company, with assets from Moscow to New York. He then bought landmark Manhattan properties with borrowed money just as the market reached its peak.
“He became, slowly, slowly, a very great believer in himself -- that everything he touched turned into a success and that everything he did had God’s blessing,” said Avi Nota, who in 2007 stepped down as chief executive officer of an Africa- Israel division that develops projects in central and eastern Europe. “When the crisis emerged, he was caught blindsided.”
Leviev, a member of the Chabad-Hasidic movement who travels with a band of bearded bodyguards, is now trying to reach an agreement with Africa-Israel’s creditors to avoid having to seek bankruptcy protection. Africa-Israel bonds make up about 0.6 percent of the total amount of pension savings that Israeli financial institutions manage, the Finance Ministry said in August.
His Own Money
A proposal presented to the court on Dec. 2 would cut Leviev’s stake to 53 percent from 75 percent and inject about $200 million of his own money into Yehud, Israel-based Africa- Israel. The company had filed with an Israeli court to hold an official assembly, in which bondholders would vote on the debt deal.
The biggest economic meltdown since the Great Depression has reduced demand for real estate, making it harder for Africa- Israel, which has reported a loss in five of the past six quarters, to cover debt payments.
Leviev was one of several Israeli investors in New York real estate during the boom years, including fellow billionaire Yitzhak Tshuva, whose holding company purchased the Plaza Hotel in 2004 for $675 million.
Africa-Israel made its highest-profile acquisitions just before the onset of the credit crunch in 2007. They included the former New York Times headquarters on Times Square for $525 million and Manhattan’s Clock Tower building for $200 million.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aAhFtCklnxJ0
“Our biggest mistake was our investments in the U.S.,” said the diamond mogul turned real estate investor, who just two years earlier was ranked by the Israeli newspaper TheMarker as the country’s richest man. The revelation, in Leviev’s Russian- accented Hebrew, rocked Israel’s markets, sending its benchmark stock index to its biggest drop since June.
Leviev, 53, born in Soviet Uzbekistan, went from success to success in the decade before the credit crisis. He made his fortune as owner of the world’s largest cutter and polisher of diamonds before turning Africa-Israel into a multibillion-dollar company, with assets from Moscow to New York. He then bought landmark Manhattan properties with borrowed money just as the market reached its peak.
“He became, slowly, slowly, a very great believer in himself -- that everything he touched turned into a success and that everything he did had God’s blessing,” said Avi Nota, who in 2007 stepped down as chief executive officer of an Africa- Israel division that develops projects in central and eastern Europe. “When the crisis emerged, he was caught blindsided.”
Leviev, a member of the Chabad-Hasidic movement who travels with a band of bearded bodyguards, is now trying to reach an agreement with Africa-Israel’s creditors to avoid having to seek bankruptcy protection. Africa-Israel bonds make up about 0.6 percent of the total amount of pension savings that Israeli financial institutions manage, the Finance Ministry said in August.
His Own Money
A proposal presented to the court on Dec. 2 would cut Leviev’s stake to 53 percent from 75 percent and inject about $200 million of his own money into Yehud, Israel-based Africa- Israel. The company had filed with an Israeli court to hold an official assembly, in which bondholders would vote on the debt deal.
The biggest economic meltdown since the Great Depression has reduced demand for real estate, making it harder for Africa- Israel, which has reported a loss in five of the past six quarters, to cover debt payments.
Leviev was one of several Israeli investors in New York real estate during the boom years, including fellow billionaire Yitzhak Tshuva, whose holding company purchased the Plaza Hotel in 2004 for $675 million.
Africa-Israel made its highest-profile acquisitions just before the onset of the credit crunch in 2007. They included the former New York Times headquarters on Times Square for $525 million and Manhattan’s Clock Tower building for $200 million.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aAhFtCklnxJ0
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