Haaretz reports that Lev Leviev’s Africa Israel Investments faces insurmountable debt obligations and will be forced to negotiate a restructuring with his creditor banks. This means that Leviev could lose control of his empire or, at the very least, that he will be forced to cede a large portion of his company to the banks. Depending on how they view his leadership, he may or may not remain with the company.
Despite the fact that AI’s share price has rebounded handily in recent months it is still down 75-80% from a year ago. Further, Leviev’s real estate portfolio has taken a tremendous pounding, with one property alone, the old New York Times Building, falling in value from $690 million t0 $315 million. AI lost $1 billion in 2008. Its 2nd quarter 2009 statement will report an estimated $350 million loss.
Earlier this week, Global BDS activists announced that a British subsidiary of the Wall Street investment house, Blackrock, had divested of its Africa Israel holdings, putting further financial pressure on Leviev. This action came as the result of pressure from Norwegian banks which offer Blackrock funds to their customers. The banks had investigated AI’s participation in settlement building projects in the West Bank (Maaleh Adumim and a number of others) and determined that such violations of international law would not be acceptable to their clients.
Thus, Leviev has become the first financial victim of the BDS movement: the first Israeli company to suffer a substantial hit. No doubt, he will not be the last. This puts other Israeli companies which profit from the Occupation on notice that they are vulnerable.
If there are any economists among my readers could you e mail me or comment below. I’d like to discuss in greater detail what the economic repercussions could be for Leviev.