The slump in prices for IDB Development Corporation's bonds has put US private equity fund York Capital Management in a position to take over the company, through which IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman Nochi Dankner, controls the group's companies.
York Capital, which once owned Psagot Investment House Ltd., has bought IDB Development bonds with a nominal value of NIS 800 million over the past few months, and now owns 20% of the company's debt. York Capital paid NIS 400 million for the bonds - half their par value. By controlling IDB Development's debt, York Capital could become a controlling partner in the company.
IDB Development controls Discount Investment Corporation (TASE: DISI), and through it, Koor Industries Ltd. (TASE:KOR) (including its stake in Makhteshim Agan Industries Ltd.), Shufersal Ltd. (TASE:SAE), Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), and Property and Building Ltd. (TASE: PTBL), as well as Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Elron Electronic Industries Ltd. (TASE: ELRN) and other companies. IDB Development's bonds are currently traded at half their par value.
IDB Development posted a net loss of NIS 1.25 billion for the second quarter of 2012. Last month, Standard & Poor's Maalot Ltd. downgraded its bonds to BB from BBB+, with a "Negative" outlook.
Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2012
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