Nochi Dankner has injected NIS 700 million into Koor Industries Ltd. (TASE:KOR), enabling the company to reach an agreement with Bank Hapoalim (TASE: POLI) over its NIS 900 million debt to the bank. IDB Holding Corp. Ltd. (TASE:IDBH) units IDB Development Corporation and Discount Investment Corporation (TASE: DISI) provided Koor with a bridge loan, enabling the company to recalculate its market cap/debt ratio.
Koor will repay the bridge loan when it receives the loan from China National Chemical Corporation (ChemChina) as part of the sale of Koor subsidiary Makhteshim Agan Industries Ltd. (TASE: MAIN), or on January 1, 2013, whichever comes first.
In the agreement with Bank Hapoalim, Koor's market cap/debt ratio was lowered from 1.4 to 1.32, and Koor promised that the ratio would not fall below 1.32, and any drop below the 1.32 ratio would not constitute a breach of the financial covenants provided that it was corrected within 14 days.
Koor is not in breach of the financial covenant with Bank Hapoalim, as its market cap/debt ratio is 1.49.
In a separate development, Koor has sold a quarter of its 3.21% holding in Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ) for NIS 900 million. Koor lost NIS 270 million on the sales, due to the plunge in Credit Suisse's share price compared with the purchase price.
Koor's share price fell 8% in morning trading today to NIS 33.74, giving a market cap of NIS 1.73 billion, after falling 15.5% yesterday.
Published by Globes [online], Israel business news - www.globes-online.com - on August 11, 2011
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