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Judge approves Africa Israel debt restructuring plan

JERUSALEM, March 22 (Reuters) - A Tel Aviv judge has approved a plan enabling Israeli real estate developer Africa Israel Investments to restructure 7.4 billion shekels ($2 billion) of debt, the company said on Sunday. Bondholders and shareholders of Africa Israel last week approved the plan but it still needed court endorsement. Africa Israel shares rose 1.8 percent on the news to 44.06 shekels in afternoon trade in Tel Aviv. Its bonds were flat to down 0.7 percent. The company, which last year defaulted on a series of bonds, was hit hard by the real estate meltdown in the United States, Russia and eastern Europe. Chief Executive Officer Izzy Cohen has said the finalisation of this deal will be a milestone for Africa Israel, enabling it to return to focus on doing business and developing the company's projects. Under the deal hammered out last October, Africa Israel agreed to convert 1.2 billion shekels in bonds for shares in Russia-focused unit AFI Development and Israel-based unit Africa Israel Properties. As a result, Africa Israel's stake in AFI Development will fall to 54 percent from 71.7 percent. Also under the deal, bondholders will receive a cash payment of 550 million shekels and Africa Israel will issue a new series of two-year bonds worth 1 billion shekels and 16-year bonds worth 3.4 billion. The company reached a separate deal in December with holders of a bond series on which it had failed to pay 557 million shekels in principal. ($1 = 3.73 shekels) (Reporting by Steven Scheer; Editing by Hans Peters) Keywords: AFRICAISRAEL/DEBT (steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters Messaging: steven.scheer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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