A Tel Aviv court today approved a 2 billion-shekel ($570 million) debt-settlement offer that will transfer control of IDB Holding Corp. to a group led by Argentine businessman Eduardo Elsztain.
“The report on the investors met disclosure requirements and showed that they can meet commitments for debt restructuring,” Judge Eitan Orenstein said at the district court hearing in Tel Aviv. Parties have 15 days to appeal today’s decision.
The court on Dec. 17 gave preliminary approval to Elsztain’s bid for one of Israel’s biggest holding companies over an offer by IDB Chairman Nochi Dankner and investor Alexander Granovsky. Final approval was conditioned on investors, including Extra Holding’s Moti Ben-Moshe, providing additional financial information to regulators.
“The battle has come to an end”, Ben-Moshe said in Tel Aviv today following the hearing. “There is immense potential in IDB and room for increasing value to holders.”
The company’s shares rallied 25 percent before being halted in anticipation of the court ruling. The holding company’s 1.07 billion shekels of 5.1 percent bonds due in December 2020 rose four basis points, or 0.04 percentage point to 31 percent. Trading in the stock and notes did not resume today.
IDB indirectly controls Cellcom Israel Ltd., Israel’s biggest mobile-phone provider, and Shufersal Ltd., the country’s largest supermarket chain. It ran into financial difficulty following unprofitable investments in a Las Vegas hotel project, a Credit Suisse AG share purchase and domestic regulations to boost competition among mobile-phone carriers.
Elsztain’s debt plan includes a cash injection of 876 million shekels, as well as 650 million shekels deposited into an escrow account by Extra, which is based in Neuss, Germany.
Ben-Moshe has served as chairman of Extra since July 2008 and was previously involved in a private equity fund with investments in new technologies, including renewable energies.
Orenstein appointed court advisers Hagai Ullman and Eyal Gabbai as trustees to oversee the process.