The court hearing to decide the fate of IDB Holding Corp. Ltd. (TASE:IDBH) was held today, after IDB chairman Nochi Dankner and Alexander Granovsky secured NIS 520 million. Tel Aviv District Court Judge Eitan Orenstin had ordered them to deposit NIS 500 million to prevent the transfer of control of the company to its bondholders.
At the start of the hearing, Judge Orenstin asked what were the terms of the transfer by Emblaze Ltd. (LSE: BLZ) to IDB and how long would it take to obtain the permission to make the transfer. Granovsky's attorney, Adv. Israel Shimonov, replied, "We have power of attorney to vote in favor of the investment in IDB. We have more than 40% of the voting rights, and we aim to reach 50%. As you know, not all the shareholders attend meetings."
IDB's attorney, Adv. Ram Caspi, said, "We worked above and beyond the letter of the law, including working simultaneously on the sale of Clal Insurance. According to Elsztain's proposal, there is no more IDB Holding, but a company listed on the Tel Aviv Stock Exchange (TASE). We will submit an improved offer for a debt settlement. The company's offer should be the only one placed before the bondholders for a vote. The company should not have to compete against other offers."
Orenstin interrupted Caspi, saying, "You still have no agreement, and it also depends on the approval by Emblaze's general meeting. We're not there yet. You need an extension."
Adv. Guy Gissin, who represents IDB Development Corporation's bondholders, said, "It is clear to us that under both the offers, that of Granovsky and that of Elsztain, money will be injected in IDB Development so that it can survive 2014. We therefore want 75% of the money to be deposited with the trustee, as well as 75% of the money already deposited with Adv. Hagai Olman to meet the company's payments to its creditors, to go to IDB Development's creditors."
Judge Orenstin said that an external injection of capital was preferable to the sale of assets. He asked, "Maybe it would be better to wait on the sale of assets?"
IDB Development's attorney Adv. Amir Bartov replied, "It is better to continue with the sale of Clal Insurance. It was made regardless of the raising of capital, and we request for the sale of Clal Insurance to be approved."
Bank Hapoalim's (TASE: POLI) attorney, Adv. Pinchas Rubin, threatened, "A distribution in kind between IDB Holding's creditors creates a problem for us, as a creditor of IDB Development. Change in control means immediate repayment of the credit granted. It is not impossible that the banks will exercise this right."
At the end of the hearing, Judge Orenstin wished the participants in the hearing a "Happy New Year", and left the courtroom. He will apparently issue a ruling later today.
Published by Globes [online], Israel business news - www.globes-online.com - on August 25, 2013
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