IDB Holding Corp. (IDBH) met a court demand to put 500 million shekels ($139 million) into a trustee account, fueling bets that its controlling shareholder Nochi Dankner will get more time to submit a debt plan.
While meeting the court-ordered deadline before today’s hearing in Tel Aviv, the company asked to delay creditor proceedings that would take control from Dankner. The court hasn’t made a decision on the request, according to an e-mailed statement today. The company has about 2 billion shekels of debt outstanding.
Dankner has been trying to sell assets and find investors for his holding company, which owns stakes in Israel’s biggest supermarket chain, Shufersal Ltd. (SAE), and its largest mobile operator, Cellcom Israel Ltd. (CEL) Emblaze Ltd. (BLZ), based in Hertzliya Pituach, Israel, and Tel Aviv-based Netz Group Ltd. (NETZ) on Aug. 15 offered 826 million shekels for a 80 percent stake in debt-strapped IDB Holding. That values the company at 1.03 billion shekels, more than three times its market capitalization.
Both Dankner and creditors “should get enough time to submit and improve proposals,” Eyal Gabbai, the court-appointed economic expert, said at the hearing. “Competition is good and will bring maximum return for creditors.”
The combination of unprofitable investments and regulations to boost competition, cut IDB Holding’s market value to 330 million shekels from 5.06 billion shekels at the end of 2010, according to data compiled by Bloomberg.
Ahead of the court session, IDB Holding received another takeover offer and reached an accord to sell part of its stake in Clal Insurance Enterprise Holdings Ltd. (CLIS) for 1.47 billion shekels to a Chinese Investor. Argentine businessman Eduardo Elsztain, who was also present at the court hearing, has been in talks with bondholders’ trustees for an investment of 770 million shekels in exchange for a 51 percent stake in the IDB Development Corp. unit
“We worked above and beyond to meet the conditions and deadlines of the court,” Ram Caspi, the attorney representing IDB Holding, said at the hearing. “We will submit an improved offer for a debt settlement which should be the only one submitted to bondholders before a vote.”
IDB Holding’s loss in the second quarter narrowed to 108 million shekels from 1.27 billion shekels a year ago, it said today.
“We expect the court to announce a time extension, which hopefully won’t be too long,” Guy Gissin, a legal representative of the creditors of IDB Development Corp., a unit of IDB Holding said at the hearing.
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