Africa Israel board approves debt restructuring plan

* Says board of directors approves deal with bondholders

* Seeks March 14 meeting of bondholders, shareholders

JERUSALEM, Feb 8 (Reuters) - Troubled real estate developer Africa Israel Investments AFIL01.TA said on Monday its board of directors had approved a deal with bondholders to restructure some 7.4 billion ($2 billion) shekels in debt.

The company, which last year defaulted on a series of bonds, said it had asked a Tel Aviv court to approve March 14 as the date for a meeting of its board, shareholders and bondholders to jointly approve the restructuring plan.

Its shares were down 0.6 percent at midday, compared with modest losses on the broader Tel Aviv bourse, while its bond prices were down 0.2 to 0.8 percent.

Africa Israel, which has been hit hard by the real estate meltdown in the United States, Russia and eastern Europe, reached a debt restructuring agreement with bondholders in October but it still needs to be approved by all sides involved and must get the backing of bank lenders.

Under the October deal, Africa Israel agreed to convert 1.2 billion shekels in bonds for shares in AFI Development and Israel-based unit Africa Israel Properties AFPR.TA. [ID:nLU380972]

The company said it would present the findings of an external appraiser that valued the assets of AFI Development AFIDLq.L, its Russia-focused real estate unit to bondholders at the planned March 14 meeting.

The decision to be more transparent is in line with a recommendation by the Israel Securities Authority, Africa Israel said.

Also under the October 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 principle. [ID:nLA659555] ($1 = 3.72 shekels) (Reporting by Joseph Nasr; editing by Karen Foster)