Yesterday, as expected, the bondholders in Delek Group Ltd. (TASE: DLEKG) agreed the amendments to the trust deeds of the company's various bond series. Details of the vote will be released later. Majorities of 66-75% (depending on the terms of each trust deed) were required for the changes to pass.
Delek Group, controlled by Yitzhak Tshuva, owes some NIS 6 billion to its bondholders. The main reason for the bondholders' agreement to the changes proposed is that they are based on giving Delek Group a recovery period while stipulating milestones that, should Delek Group fail to meet them, will give the bondholders the right to demand immediate repayment of all the debt.
Delek Group undertakes to raise at least NIS 500 million by April 2021, to sell assets to enable it to repay NIS 842 million bank debt, and to mortgage 40% of the participation units in energy exploration company Delek Drilling to the bondholders.
Delek Group raised NIS 137 million last month, and is obliged to raise a further NIS 163 million by July 30. The next fund-raising milestones are NIS 150 million by December 15 and NIS 50 million by April 8, 2021.
Meeting the various milestones will give Delek Group a year's exemption from abiding by the financial covenants in the bond trust deeds. If, however, the financial position of the company or of its subsidiaries deteriorates substantially, the bondholders will be entitled to demand immediate repayment.
The agreement sets out financial milestones up to the end of 2023 for shareholders' equity, the company's credit rating, and the level of management and general expenses.
Published by Globes, Israel business news - en.globes.co.il - on June 18, 2020
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