This morning, the Tel Aviv District Court began to hear the request of the representatives of the IDB Development bondholders, headed by York Capital and Psagot, to force a debt arrangement on the company. The two sides were told to continue negotiations until tomorrow morning and to reach a solution that will not lead to the collapse of the IDB pyramid, or else the judge will decide himself on the future of the company.
"The company's situation is problematic, but the remedy requested is drastic. The company's balance sheet is good and we are still not at the stage for this remedy," Judge Eitan Orenstein said.
Orenstein sharply criticized the banks and the huge loans that they gave the company. "This raises questions about the way the banks gave credit. Where were the banks' credit committees? What do you expect the court to give you compliments on such conduct?"
Nochi Dankner, chairman and controlling shareholder of IDB Holding Corp. Ltd. (TASE:IDBH), IDB Development's parent company, did not attend the hearing. "On Thursday, a deal was signed between Nochi Dankner and Eduardo Elsztain for the investment of a further $75 million, on top of the $25 million already invested. Under the agreement, $18 million will be invested in Ganden, and $57 million will be invested in IDB Holding. There is also agreement on joint control by Elsztain and Dankner in IDB. The deal is conditional upon an a settlement in IDB Holding that has already been agreed in principle with the representative of the IDB Holding bondholders, and has the agreement of the banks. Any change for the worse is liable to lead to the cancellation of the investment agreement," counsel for IDB Holding said at the hearing.
IDB's lawyers claimed that "the company is clearly liquid."
Published by Globes [online], Israel business news - www.globes-online.com - on April 28, 2013
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