IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman Nochi Dankner, today notified the TASE that it has approval from eight Israeli and foreign banks for the sale of Clal Industries and Investments Ltd. (TASE: CII) to Len Blavatnik's Access Industries Inc. IDB said that it had reached agreements with the banks on the financial covenants for the sale.
On May 20, IDB announced the sale of 50% of Clal Industries to Access Industries at a company value of NIS 2.5 billion. IDB Holding subsidiary IDB Development Corporation expects to report a capital gain NIS 325-400 million on the sale.
IDB Holding said today that, as part of the agreements with the banks, the solo debt of IDB Development and certain wholly-owned subsidiaries, which totals NIS 6.7 billion for the purposes of the net debt covenant, will be reduced by the actual cash proceeds IDB Development will receive from the sale.
The covenant calculated on the basis of the economic capital will be replaced by the following covenant: the average aggregate market value of IDB Development's holdings in Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), and Shufersal Ltd. (TASE:SAE), during a period to be determined, will not fall below NIS 1.69 billion. In addition, the average aggregate market value of the main holdings divided by the outstanding debt of each lending corporation, during a period to be determined, will not fall below NIS 2.81 billion.
The agreement also sets out remedy period with regard to this covenant, and additional provisions for breach in the event of prolonged suspension of trading in the shares of these main holdings, under terms that will be set.
IDB Holding's share price rose 6.6% in morning trading to NIS 13.54, giving a market cap of NIS 620 million, and Clal Industries' share price rose 3.7% to NIS 11.72, giving a market cap of NIS 1.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2012
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