Ilan Ben Dov today called Tao Tsuot Ltd. (TASE: TAO-M) bondholders to resume talks on a debt settlement next week, and not take legal action.
"Ben Dov welcomes negotiations between the parties to reach an agreement, and be believes that negotiations will yield better results for all the parties than any alternative," his lawyer, Adv. Yosef Avraham, said in a letter to bondholders' representative. He offered "to return to the negotiating table for intensive and purposeful talks in the presence of all the parties to formulate an agreed upon proposal by all the parties, including other creditors, such as Bank Leumi. For this purpose, I propose to schedule a meeting for the first week of January 2012."
Bank Leumi (TASE: LUMI) and Tao's bondholders oppose the company's proposal for a debt settlement, which would include a write-off of NIS 310 million on the company's Series 2 and 3 bonds. In exchange, the bondholders would receive two new bond series totaled NIS 248 million, NIS 30 million in cash, 15% of Tao shares, and a lien on 16.25% of Suny Electronics Ltd. (TASE: SUNY), in which Ben Dov owns 70.8%.
Suny is the parent company of Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF), through which Ben Dov controls Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), with a 44.5% stake.
The bondholders have scheduled a meeting for January 1, and are threatening an immediate recall of the bonds. In response, Ben Dov has given them an ultimatum: if you seek legal remedies, the negotiations will be cancelled. He has also asked the bondholders to cancel the January 1 meeting.
"Ben Dov's consent to hold negotiations to reach an agreed upon solution is subject on you, the bondholders' representatives, promising not to take legal action against the company or its directors, or its officers, or my client, and to avoid any other action, including but not limited to, demanding immediate repayment of the company's debt or part of it, which would prevent or frustrate the formulation of a settlement," wrote the lawyer.
Tao has been in financial trouble for four year. It lost a further NIS 98 million in January-September 2011, after losing hundreds of millions of shekels in the preceding years. The company's shareholders' equity deficit totals NIS 500 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 27, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011