Elbit Imaging Drops on Debt Settlement Concern: Tel Aviv Mover

Elbit Imaging Ltd. fell to the lowest level in almost five months on concern prolonged debt settlement negotiations will hurt the Israeli investment company’s operations.

Shares of the Tel Aviv-based company dropped 1.4 percent to 6.55 shekels at the close in Israel, the lowest since Feb. 12. About 137,000 shares traded, more than 3.9 times the three-month daily average. The stock has tumbled 45 percent since this year’s peak on Feb. 20, after Standard and Poor’s Maalot lowered the company’s rating to default from ilCC.

A Tel Aviv District Court has ordered creditors to meet on July 18 to vote on a debt-settlement proposal submitted by the company in May and an alternative proposal submitted to the court by representatives of some bondholders. Calcalist reported today that bondholder trustees have asked the court for additional information concerning cash flow.

“Management is dealing with survival and not with the running of the company,” Adar Etzioni, head of research at Migdal Capital Markets in Tel Aviv, said today by phone. “This is hurting the development of projects and their value.”

Elbit said in an e-mailed statement today that it has published all the necessary data needed for the vote. The company last month adjusted its proposal, offering bondholders a 90 percent stake against debt and two series of new notes for a total 500 million shekels ($137 million).

S&P cut the company’s rating after it failed to make payments to bondholders in February. Moody’s Midroog that month lowered Elbit’s rating to CA, two levels above default, from B2.

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