TEL AVIV, June 2 Israeli conglomerate Africa Israel Investments said on Tuesday it moved ahead with the sale of its 50 percent stake in the Gottex swimwear firm to its joint venture partners with the receipt of a 44 million shekel ($11.3 million) advance payment.
Africa Israel (AFIL01.TA) said 24 million shekels of the advance would not be refunded even if the deal is not completed, barring a breach of contract by the seller.
The company will receive at least 166 million shekels for its stake in Gottex. An additional payment of $7.5 million could be made depending on the sale of clothing brands Zara and Pull and Bear in Israel over the next four years.
In January, Africa Israel signed a memorandum of understanding to sell its stake in Gottex to two foreign businessmen who currently own the other half.
The company gave no further details about the two businessmen.
The deal is subject to the receipt of various approvals by July 25.
Africa Israel will post a pretax gain of 92 million shekels from the sale.
Gottex designs beachwear in Israel and abroad through Gottex Models Ltd and Christina America Inc. It also markets clothing brands Zara, Pull and Bear and Massimo Dutti in Israel under licence from Spain's Inditex SA (ITX.MC).
Africa Israel has said Gottex was not core to the group's activities, which focus on residential, commercial and hotel real estate development, construction, infrastructure and industry in Israel, Russia, former Soviet Union countries, the U.S. and Eastern Europe. ($1 = 3.90 shekels) (Reporting by Tova Cohen; editing by Simon Jessop)