Sources inform ''Globes'' that bondholders of Benny Steinmetz-controlled Scorpio Real Estate Ltd. (TASE: SCRP.B1) have rejected, for now, the proposed debt settlement structure. The financial institutions are demanding that Steinmetz improve nearly all of the clauses of the agreement proposed to them and to Bank Hapoalim (TASE: POLI), Scorpio's largest creditor.
Scorpio owes the bondholders and Bank Hapoalim about NIS 1 billion.
Earlier this week, Steinmetz asked the bondholders to postpone payment on the principle of the bond for five years from January 2010 to January 2015. He also asked the bank to reschedule Scorpio's debt payments. The settlement will be the third largest debt settlement to date, after Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) and Zim Integrated Shipping Services Ltd..
"Globes" has obtained a copy of the proposed general structure of the settlement, in a document that Scorpio describes as a "non-paper". The document states that Steinmetz will seek to materially strengthen Scorpio's shareholders' equity and the collateral for the bank and bondholders. He also proposed an offering of shares on the Tel Aviv Stock Exchange (TASE), or to register shares for trading.
The strengthening of Scorpio's shareholders' equity will be carried out by merging a private property company, owned by Steinmetz, which has an estimated value of $400 million, into Scorpio. The name of the company is not known, but Scorpio stated that it is engaged in the development, planning, and construction of property and income-producing real estate projects in Western and Eastern Europe.
Published by Globes [online], Israel business news - www.globes-online.com - on November 26, 2009
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