Africa Israel Investments sells stake in Israeli highway

Africa Israel Investments, an Israeli real estate developer, has decided to sell its 37.5% stake in Derech Eretz Highways, the country’s only toll road. The capital raised will be used to fund the company’s investment plans and redeem short-term bonds.

Israeli real estate developer Africa Israel Investments has decided to sell its 37.5 percent stake in Israel’s only toll road to Israel Infrastructure Fund (IIF), a source close to the seller told Infrastructure Investor.

Israel's Highway

The Investment firm will sell the stake in Derech Eretz Highways – the vehicle that built and funded Israel’s only toll road, known as Highway 6 – for 475 million shekels (€98.3 million; $125 million) the source said. The capital raised from selling the stake will be used to expand the company’s investment plans and redeem short-term bonds, among others.

In January 2009, IIF invested a total of $1.3 billion in the Derech Eretz highways project, according to a press release issued by IIF.

Media reports suggest that following the acquisition by IIF, Israeli construction firm Shikun & Binui will own 37.5 percent of Derech Eretz while Canadian Highways Investment will own the remaining 25 percent.

Africa Israel Investments is an international holding and investment company based in Israel. Owned and controlled by diamond baron Lev Leviev, the group is involved in areas such as real estate, construction, infrastructure and manufacturing. The company is also listed on the Tel Aviv Stock Exchange.

IIF is a private equity fund focused on infrastructure-related assets around the world. IIF’s investment services include management of private investment syndicates, principal investment as a project developer, equity investment and mezzanine debt provision.