Yaakov Luxembourg is starting to realize his plan to take over Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), revealed in "Globes" yesterday evening. Yesterday, Luxembourg approached the trustee of three series of Suny Electronics Ltd. (TASE: SUNY) bonds that he holds, Clal Finance Trust, with a demand that, on the agenda of the next bondholders meeting, to be held this Tuesday, the possibility of presenting the bonds for immediate repayment should be raised.
Since Luxembourg holds more than 10% of the bonds, the subject will be raised for discussion, and it could be that at the end of the meeting it will be decided to put it to a vote. In that event, voting papers will be distributed to the bondholders, and if there is a majority of more than 75% of the "pure" bondholders (those who do not hold securities of subsidiaries Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF) and Partner), the debt will fall due for immediate repayment.
It was revealed yesterday evening that Luxembourg, who controls investment and oil exploration company Lapidoth Israel Oil Prospectors Corporation Ltd. (TASE: LAPD), seeks to form a group of investors to take over Ilan Ben-Dov's mobile telephony company (controlled indirectly via Suny and Scailex). As far as is known, Luxembourg's longstanding IBI Funds Management (1978) Ltd. CEO Yoav Kaplan is putting together the investor group. IBI itself has a significant holding of Suny bonds.
At this stage, Luxembourg is keeping his cards close to his chest, and not revealing the way in which he intends to take over Partner. In late May, "Globes" revealed that Luxembourg, using Lapidoth's cash (NIS 272 million at the end of March), had bought Suny bonds, and bonds of its subsidiary Scailex, to the tune of NIS 35 million. Most of the investment was in Suny bonds.
Suny is currently in breach of the terms of its three series of bonds, totaling NIS 238 million. The company does not meet the financial covenants with the bondholders concerning the value of the assets supposed to be mortgaged in its favor. The bondholders have not yet received the last interest payment, amounting to NIS 6 million. Suny's financial statements have a "Going concern" qualification appended to them.
If Luxembourg's move to demand immediate repayment of Suny's debt succeeds, the bondholders, among them Lapidoth and IBI, as mentioned, will become the main shareholders in Suny, and indirectly the controlling shareholders in Scailex and Partner. Ownership of Suny will enable them to present a proposal for solving the problem of Scailex's debt, currently about NIS 1 billion greater than the value of its assets.
On the other hand, a demand for immediate repayment of Suny's debt and the transfer of control to the bondholders could also hurt them. Scailex's concession for the import of Samsung handsets could lapse with the transfer of control, as it is attributed to the warm relationship between Ben-Dov and the Korean manufacturer, meaning that the bondholders could lose one of the subsidiary's main assets.
In addition, the transfer of control in Suny would represent cause for a demand for immediate repayment of the seller's loan extended by Hutchison to Scailex when it sold its stake in Partner, amounting to $300 million, due in April 2017.
No response was obtainable from Clal Finance Trust.
Published by Globes [online], Israel business news - www.globes-online.com - on August 23, 2012
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