Eduardo Elsztain seeks to buy back control of IDB Development, which collapsed last year, after having burned some NIS 3 billion of his companies' cash during the time he held control of IDB. Earlier this month, Elsztain sent IDB's trustee, Adv. Ophir Naor, an offer to buy IDB without its cash, which is earmarked for distribution to its creditors.
Elsztain is offering just NIS 20 million, plus conditional payments if the value of the company's assets rises. The offer is conditional on cancellation of all IDB Development's claims against him, his employees, and companies he controls. Among other things, this means cancellation of the claim filed by IDB Development against IRSA, which Elsztain controls, after IRSA failed to honor its commitment to inject NIS 70 million into IDB at the beginning of September 2020.
Following receipt of the offer, the trustee of IDB Development's 9 series bonds called a meeting of the bondholders for December 19, at which they will decide whether to instruct the trustee to proceed with the offer. Sources among the bondholders say that the offer is unlikely to win a majority in the vote, because of the low amount.
IDB Development collapsed in September 2020 owing some NIS 2 billion to its bondholders. Thanks to successful asset sales, the company repaid in full its NIS 240 million debt to its secured series 15 bondholders and its NIS 920 million debt to its 14 series secured bondholders.
The asset sales left IDB with NIS 330 million cash intended for paying unsecured creditors, chief among them the unsecured series 9 bondholders, who are owed NIS 900 million. In addition, IDB owns two assets that should finance payment of at least part of the remaining debt.
The first is 25% of airline Israir, while the second is 25.8% of real estate company IDBG, which holds the Tivoli commercial and office project in Las Vegas. The IDB trustee also has the right to sue former senior executives at the company for decisions and actions that led to its collapse.
Published by Globes, Israel business news - en.globes.co.il - on December 13, 2021.
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