Europe-Israel MMS Ltd., the private company through which Mordechay Zisser controls Elbit Imaging Ltd. (Nasdaq: EMITF; TASE: EMIT) yesterday petitioned the Tel Aviv District Court to appoint Chen Berdachev as trustee of the company to reach a debt settlement and implement a recovery program for the company, because of Europe-Israel's dispute with Bank Hapoalim (TASE: POLI).
Europe-Israel said in response, "Europe-Israel finds it astonishing and regrettable that, even though the credit debt with Bank Hapoalim and Europe-Israel is defined in the agreement and paid as agreed, Bank Hapoalim has warned that it intends to petition for the appointment of a receiver for the attached shares, even though this would harm the bank's own interests.
"In the petition, Europe-Israel wish to prevent unilateral and extortionist measures by appointing a trustee who will draw up a settlement for the company and balance the interests of all the relevant parties, while providing fair protection for both the bank and other shareholders."
Europe-Israel adds that Bank Hapoalim's conduct is based on irrelevant considerations. The company claims that the bank's threat to initiate receivership measures involves serious risks to company's solvent subsidiaries, its bondholders, shareholders, and others. It adds that the proposed debt settlement will result in the company's financial recovery and an aggregate shareholders' equity of billions of shekels, which will serve the interests of all the creditors, especially the bank.
Under Elbit Imaging's debt settlement proposal, Zisser will become a minority shareholder in the company, although he will continue to serve as CEO.
Bank Hapoalim has not yet exercised its threat to seize Zisser's assets, including the controlling shares in Elbit Imaging, on which the bank has a lien against Europe-Israel's NIS 850 million debt to the bank. Elbit Imaging's bond debt totals NIS 2.2 billion, and it has suspended principal and interest payments on its short-term bonds. The company also owes the banks NIS 300 million, which would not be affected by a debt settlement with the bondholders.
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2013
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