Eduardo Elsztain in apparently deeply involved in the debt arrangement negotiations by IDB Holding Corp. Ltd. (TASE:IDBH), controlled by Nochi Dankner. Elsztain's partner Saul Zang attended last Thursday's meeting between IDB executives and bondholders.
Elzstain will invest an addition $75 million in IDB's controlling shareholder Ganden Investments Ltd., if he exercises his option by February. Exercise of the option will mainly depend on a debt arrangement between IDB and the investment institutions which hold the company's bonds.
After the cards were laid on the table, real negotiations on the debt settlement and IDB's haircut began a few days ago. The day after the Dankner's revised main proposals were disclosed, including a write-off of NIS 500-600 million (30% of the adjusted debt), some knowledgeable bondholders said that while there was no choice about a write-off, they expect a much smaller one than what was has been offered so far, and that the present offer is inadequate.
An investment institution which owns bonds in several IDB companies told "Globes" on Thursday, "I really don’t understand IDB's debt arrangement proposal. How can we consider it? Ultimately, there is a very basic question, which is whether the owners or his representatives can bring substantial money here and now for the arrangement, rather than conditionally in several years. The immediate injection of NIS 140 million offered is not enough. What has been offered to the bondholders is not something that they cannot get by taking over the company, so at the moment it seems very logical to hand the company over to its creditors."
Furthermore, analysis made by sources close to the bondholders' representatives found that the write-off offered by IDB could exceed NIS 1 billion in the worst-case scenario - more than 50% of the adjusted debt. "We won't accept a haircut," said a source involved in the matter.
Published by Globes [online], Israel business news - www.globes-online.com - on January 27, 2013
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