Leviev Conglomerate May Delist Shares

VedomostiLev Leviev, Israel's richest man, owns a 71 percent stake in AFI Develoment, which is considering delisting its shares.
TEL AVIV — Israeli conglomerate Africa Israel Investments is considering delisting its London-listed subsidiary AFI Development because of a sharp drop in its value, TheMarker financial web site reported on Sunday.

Africa Israel, controlled by diamond billionaire Lev Leviev, Israel's wealthiest man, owns 71 percent of AFI Development, a Russia-focused real estate company.

Since going public in May 2007 at a valuation of $7.3 billion, AFI Development has lost 85 percent of its market value because of the financial and real estate crisis in Russia, TheMarker noted.

According to TheMarker, either Africa Israel could offer to buy up AFI Development or AFI Development could buy back the public's shares.

Shares in Africa Israel were down 8.3 percent in morning trade in Tel Aviv, compared with declines of nearly 2.7 percent in the broader market.

AFI Development's net profit in the first six months of 2008 nearly doubled to $97.3 million while its net asset value increased 13 percent year-on-year to $6.3 billion.

Leviev said in a statement to the Tel Aviv stock exchange last year that much of the property controlled by AFI's subsidiary is located in Moscow and includes about 2.6 million square meters of commercial space, offices and residential housing.

An AFI subsidiary, construction firm Danya Cebus, announced last month that it will build a $250 million real estate project in the center of Moscow. The project includes a complex with three residential towers ranging from 35 to 45 stories with a total of 656 apartments, a shopping mall and underground parking.

A spokeswoman for Africa Israel Investments declined to comment on the report.