IDB Holding Corp., which has about 2 billion shekels ($556 million) of debt outstanding, has until October to come up with a repayment plan after it met a court demand for a deposit of 500 million shekels.
A Tel Aviv court gave controlling shareholder Nochi Dankner until Oct. 20 to submit a debt plan and set the next hearing for Nov. 25, according to an e-mailed court statement today. The court also approved the sale of a 32 percent stake in Clal Insurance Enterprise Holdings Ltd. for 1.47 billion shekels.
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., and its largest mobile operator, Cellcom Israel Ltd. York Capital Management LP was among bondholders of IDB Holding and unit IDB Development Corp. Ltd. that joined hands in May to force a debt-to-equity swap increasing the possibility that Dankner may lose control of the companies.
Emblaze Ltd., based in Hertzliya Pituach, Israel, and Tel Aviv-based Netz Group Ltd. 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 value. Argentine businessman Eduardo Elsztain, who was also present at the court hearing yesterday, 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.
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.