"Regrettably, many bondholders are witness to a serious attempt to create chaos at IDB Development and IDB Holding. There are quite a few parties, and each of them knows whom I mean, which are cynically trying to take over excellent assets. Between ourselves, we are amazed at this needlessly harmful aggressiveness, which you know raises deep concern about interests that are for the good of the company. Some people are driven by base motives to achieve hidden agendas in bad faith," said IDB Holding Corp. Ltd. (TASE:IDBH) CEO Haim Gavrieli at today's meeting of bondholders of subsidiary IDB Development Corporation at the City Hotel in Tel Aviv. The 50 participants include York Capital Management's Israeli representative Jeremy Black.
Gavrieli continued, "IDB Development has liquid reserves through the first quarter of 2014. At IDB Holding, we are considering business moves, about which we have updated IDB Development. An example is the attempt to sell IDB Development's holding in Clal Insurance to Koor."
IDB Development is the parent company of Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) and indirectly controls Koor Industries Ltd. (TASE:KOR) through Discount Investment Corporation (TASE: DISI).
Gavrieli added, "Anyone who wants to see his money on time should expect the representatives to support this move. Instead, we've had a hasty rush to the newspapers to say no, even before seeing the details of the deal, its valuation, and before the boards of directors have discussed it. As everbody knows, the representatives' real objective is to sabotage the deal at any price. When I talk about hidden agendas - they are no longer hidden on the table.
"Everyone knows that there are talks at IDB Holding, and that the controlling shareholder intends to inject capital to create a fair settlement. We are again encountering representatives [of IDB Development's bondholders] who are trying to create chaos. Regrettably, this is the conclusion of the meeting. There is a violent attempt to undermine IDB Holding and IDB Development to cynically take over the assets."
Bondholder representative Dan Avnon said in response, "We're at a stage in which we are facing a confrontation with the company. This confrontation requires us to act in a manner appropriate in such situations. We cannot disclose to the company our modus vivendi and detail the advantages and disadvantages of each one. The company would love for us to do so, which is why we have no intention of doing it. We ask the bondholders to authorize the representatives to take operative steps, without stating exactly which step we will take, or when."
The bondholders representative's attorney added, "You, the managers of IDB Development, should raise capital. You have not given us an answer. The answer we received was, 'How do you know that we don’t want to raise capital?' Since 2007, the company has distributed dividends and bought back shares for NIS 3.9 billion. The rating agencies believe that the company and the creditors now face very serious cash flow challenges. There is only one that it is not doing - it is not raising capital for the company. The company says that it has good assets, there is no disagreement about this. It has good assets, but it has forgotten to mention that it also has liabilities."
Published by Globes [online], Israel business news - www.globes-online.com - on February 14, 2013
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