Since the end of last week, the Marathon Telecom Ltd. group, owned by Hezi Bezalel, has been making feverish attempts to organize the collateral demanded by Israel Discount Bank (TASE: DSCT) as a condition for providing the guarantee that Bezalel is obliged to deposit as a condition of his win in the mobile carrier tender on April 11.
The tenders committee will convene tomorrow to discuss whether to accede to Bezalel's request for an week's extension for filing the guarantee, or whether to disqualify his win in the tender.
It is believed that unless Bezalel deposits the guarantee today, the chances of him obtaining an extension are very low, although not zero. The inclination of the Ministry of Finance tender committee members is to disqualify Bezalel's bid in the tender and to declare the Select Communications group, which came third in the tender, as the second winner instead, alongside Mirs, owned by Patrick Drahi.
According to the tender rules, Bezalel had until midnight on Friday to present the guarantee, but he failed to do so.
Despite reports to the contrary, Discount Bank did not present tougher requirements to Bezalel last week. The guarantee is ready, but Bezalel did not produce all the approvals required from one of the overseas banks he works with. Discount Bank was unable to change the terms of the guarantee, which had been set by its board.
Bezalel has deposited a NIS 10 million guarantee, in the knowledge that if he fails to deposit the full guarantee of NIS 710 million he will forfeit that sum. As an indication of his seriousness this will be a point in his favor with the committee, but the committee is concerned that if he is given an extension and ultimately does not produce the guarantee, it will be seen in a very bad light.
Published by Globes [online], Israel business news - www.globes-online.com - on May 29, 2011
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