B. Gaon Holdings Ltd. (TASE: GAON), controlled by chairman Moshe Gaon, and Shlomo Zbeda will immediately inject NIS 20 million into Ace Auto Depot Ltd. (TASE:ACDP) to prevent the collapse of the DIY chain, which has petitioned the Central District Court for a stay of proceedings. Half of the money will be transferred within 24 hours of the signing of the agreement.
The capital will have the same status as the liquidation expenses. In other words, the debt will be repaid before the debt to Ace's bondholders, but will be subordinate to the company's bank debt.
The stay of proceeding granted to Ace last week expires today. The retailer owes its creditors NIS 450 million, including NIS 83 million to its bondholders. The company's bonds are traded at junk bond yield of 227%.
Ace's bondholders say that Gaon and Zbeda have other income, and their private businesses received tens of millions of shekels from Ace in 2008-10, on top of NIS 1.4 million in management fees. Ace bought NIS 56.5 million worth vehicle space parts and accessories from Gaon and Zbeda companies, amounting to 22-34% of the retailer's purchases in this segment, and 4-5% of its total purchases.
Gaon's income from Ace includes NIS 67 million paid in 2009-10 to ad agency Bauman Bar Rivnay Ltd., in which he owns a 24% stake.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2012
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