IDB Holding Corp. Ltd. (TASE:IDBH) has attacked the decision by its bondholders to hold a meeting today at which they will discuss insolvency proceedings. IDB warns the bondholders that liquidation now "will yield the bondholders not more than the company's cash balance, which represents 10% of the debt to them."
"The summoning of the meeting… in current circumstances is an unnecessary, unreasonable, and groundless step," IDB states in a notice to the Tel Aviv Stock Exchange, adding "Such a step directly harms the company's financial strength."
Within less than three weeks, IDB will have to pay NIS 65 million interest to holders of its D bond. The bondholders' representative body is demanding that the payment should not be made out of the company's internal sources but from external sources, such as through an injection of cash by Eduardo Elsztain. IDB has rejected the demand.
"The company forcefully rejects the attempt to raise claims of insolvency against it," IDB's notice states. "As is well known, the company is capable of meeting all its current obligations until June 2013 and has a plan for repaying its debts thereafter. It is not excessive to add that this is a company that to date has never breached a single one of its commitments to its bondholders (or to other creditors), and that time after time has demonstrated that it can successfully execute substantial moves for the purposes of surmounting the challenges it faces."
IDB currently has NIS 200 million cash, and has no material debt repayments to make before June 2013.
Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2012
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