The institutional investors have surrendered to the ultimatum issued by Beny Steinmetz over the debts of Scorpio Real Estate Ltd. (TASE: SCRP.B1), and now support the proposed debt arrangement. Sources inform "Globes" that among the five members of the bondholders' representative body, only Psagot opposed the arrangement in its current format. The parties reached their decision in a conference call held this evening.
Earlier, it seemed that the bondholders were not alarmed by Steinmetz's ultimatum for acceptance of the arrangement in Scorpio, but they did ask him to postpone the deadline to 22:00 from 18:00.
"Its topsy turvy. He owes us money, and presents us with an ultimatum. Steinmetz does us no favors when he returns the money he owes," a manager at a major institution said today. Scorpio's debts are $245 million, of which $150 million are owed to bondholders and $95 million to Bank Hapoalim.
With Bank Hapoalim, Steinmetz came to an agreement, but a gap of some $11 million remains between him and the bondholders, arising from Scorpio's demand to reduce the interest rate and to postpone part of the interest rate payments due to the bondholders. This is in the light of the "cash flow distress" that the company says it finds itself in.
Two months after Beny Steinmetz Group Resources Ltd. (BSRG) received an advance of $500 million in cash on a deal to sell 51% of subsidiary BSG Resources (Guinea) Ltd. to Brazil's Vale SA (Bovespa: VALE) for $2.5 billion, billionaire Steinmetz made open war against the bondholders of real estate company Scorpio, which he controls. Last night, in a letter to the bondholders' representatives, Steinmetz's attorney Adv. Ram Caspi presented an ultimatum - accept our debt settlement proposal by 18:00 today or the proposal will no longer be valid.
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010