Hapoalim holds up Scorpio debt arrangement

A deal cannot go ahead without the bank's approval, since the bank is a secured creditor.

Sources inform ''Globes'' that Bank Hapoalim (TASE: POLI) is blocking a debt arrangement by Benny Steinmetz's Scorpio Real Estate Ltd. (TASE: SCRP.B1) with bondholders. The company owes the bank about $100 million. Although Steinmetz has reached a deal with Scorpio's bondholders on a general restructuring of the debt, the deal cannot go ahead without the bank's approval, since the bank is a secured creditor.

At a bondholders meeting yesterday at the City Hotel in Tel Aviv, Scorpio asked to defer the upcoming payment on the bond principal, but the bondholders' trustee, Hermetic Trust (1975) Ltd. acting chairman Adv. Dan Offer, refused.

During the brief bondholders meeting, it was decided to put to a vote of the bondholders a proposal to defer a bond payment from March 4 to March 18. This would have been the second postponement of the bond payment as Steinmetz and the bondholders try to work out a deal.

Scorpio was due to pay NIS 133 million in interest and the principal on the bonds in January, but paid only the interest. Scorpio raised NIS 516 million in a bond offering in early 2007. The bonds bear 6.25% annual interest, and the principal was to be repaid in five equal annual installments in 2010-14.

Published by Globes [online], Israel business news - www.globes-online.com - on February 22, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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