Israeli real estate developer Africa Israel Investments has agreed to sell its 37.5% stake in Derech Eretz Highways to the Israel Infrastructure Fund for ILS475m ($125m).

Africa Israel, expected to receive a pretax gain of ILS200m from the deal, said the amount will be used to redeem its short-term bonds and boost the company’s revenues.

The highway transaction is subject to regulatory approval, according to Reuters.

Africa Israel was hit by the real estate meltdown last year and defaulted on a series of bonds, but received approval to restructure $2bn of its debt in March this year.

Derech Eretz built and funded 87km highway 6, Israel’s first toll road. Israeli construction firm Shikun & Binui owns 37.5% of Derech Eretz, while Canadian Highways Investment owns 25%.