Elbit Imaging Ltd. (Nasdaq: EMITF; TASE: EMIT), controlled by president Mordechay Zisser, has postponed the upcoming principal payment on its bonds, and will seek a debt settlement with it bondholders. The company has asked the bonds' trustees to postpone the payment until April 1.
Elbit Imaging's bond debt is NIS 2.5 billion, and the bonds are traded at junk bond yields of over 100%. During this month, it was due to pay NIS 80 million on its Series A and B bonds. The company's sources and uses report states that it is due to make NIS 732 million in principal and interest payments on its bonds this year, but that it has just NIS 116 million in cash, and expects NIS 1 billion in sources during the year.
In a notice to the TASE today, Elbit Imaging said, "The board of directors has authorized management to approach all the bonds' trustees and representatives to try and reach an agreement to enable the company to service all its liabilities."
Elbit Imaging added, "In view of the conflicts of interest between the holders of different bond series and the objections of some bondholders to the upcoming payments, and in view of the request by the trustees and bondholder representatives of Plaza Centers NV (LSE:PLAZWSE:WLZ) on January 31, against Plaza Center's distribution of a dividend to the company, and the warning that legal action could be taken if the company moves ahead with the distribution of the dividend (which would affect the sources presented in the sources and uses report of Elbit Imaging, which the company has met to date), Elbit Imaging hereby announces that it accepts the bondholders' demands and that it will postpone the payment on the principal to the bondholders, until talks with them are concluded."
Elbit Imaging said that it would continue making the bonds' interest payments on schedule, unless a decision is taken otherwise.
Published by Globes [online], Israel business news - www.globes-online.com - on February 5, 2013
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