IDB Development Corporation's creditor banks today held their first meeting on the company's debt, after Antitrust Authority director general David Gilo last week allowed them to meet to discuss the matter. The banks agreed to oppose the joint debt settlement proposed by the bondholders representatives of Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) and its subsidiary IDB Development. The banks propose that all of IDB Development's creditors extend the payments schedule of the company's debts, so that it can better service them.
The banks intend to shortly submit their proposal to the court, in order to bring about an organized postponement in IDB Development's debts to them, in order to improve the company's liquidity, and even allow it to raise capital if needed. The company owes NIS 1.7 billion to Bank Hapoalim (TASE: POLI), Bank Leumi (TASE: LUMI), Israel Discount Bank (TASE: DSCT), Mizrahi Tefahot Bank (TASE:MZTF), and two foreign banks, HSBC Holding plc (LSE: HSBA; HKSE: 005; NYSE, Paris: HBC) and BNP Paribas SA (Euronext: PNB). Bank Hapoalim is the biggest creditor, owed NIS 770 million. All six banks participated in today's meeting.
"IDB Development's debt situation is bad enough and should not be made worse. The banks want the compensation in IDB Development to go only to its creditors, and that IDB Holding's creditors should not be a party to, or benefit from, letting IDB Development of the hook or compensation from it," said a source. This is the best for handling debtors, especially when they are solvent. There is no special treatment here, except that the banks will receive appropriate and respectable compensation for rescheduling the payments. The banks expect substantial compensation from the company, which still has to be discussed."
The debts of Nochi Dankner's private and public companies are as follows:
Tomahawk Investments Ltd.: Bank Hapoalim - NIS 330 million; Discount Bank - NIS 100 million; Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ) - NIS 50 million; Mizrahi Tefahot Bank - NIS 30 million. Total - NIS 330 million.
Tomahawk subsidiary Ganden Holdings Ltd.: Bank Leumi - NIS 450 million; Mizrahi Tefahot Bank - NIS 80 million. Total - NIS 530 million.
Ganden subsidiary IDB Holding: Credit Suisse - NIS 160 million; Bank Leumi -NIS 100 million. Total bank debt - NIS 260 million. Bond debt - NIS 1.8 billion. Total debt - NIS 2.06 billion.
IDB Holding subsidiary IDB Development: Bank Hapoalim - NIS 770 million; BNP Paribas - NIS 310 million; Mizrahi Tefahot Bank - NIS 200 million; Bank Leumi - NIS 160 million; Discount Bank - NIS 130 million; HSBC - NIS 130 million. Total bank debt - NIS 1.74 billion. Bond debt - NIS 4 billion. Total debt - 5.74 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2013
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