Sources inform ''Globes'' that executives of IDB Development Corporation, controlled by Nochi Dankner, met with the company's bondholders representative on Thursday evening. The meeting was held under the supervision of the company's court-appointed supervisors - economic expert Eyal Gabay and external observer Adv. Hagai Olman. The parties discussed the principles that Olman wants to advance, the most important of which are a NIS 550 million capital injection into the company, most of which will come from Eduardo Elsztain, and allowing Dankner to keep control of it.
At the meeting, IDB Development said that it was interested in working out a comprehensive debt settlement for the whole group on the basis of the undertaking that Dankner and Elsztain filed with the court. The company added that it was prepared to amend the undertaking.
The bondholders representative reiterated their demands for a NIS 900 million capital injection into IDB Development in two stages.
IDB Development said that no capital injection of NIS 550 million, or even NIS 400 million, was possible by August 22 (the deadline set by Tel Aviv District Court Judge Eitan Orenstin for Dankner to sell IDB's stake in Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS). The company added that if it had NIS 400 million it would not be in talks now, but in contact with the court to release the payments and allow the company to move forward.
The question is where will the money come from. Besides Elsztain, IDB Development had no answer, and merely reiterated its request for time to put together the money in line with its proposal. As a result, the material disputes between the parties remain unresolved: how much capital should be injected into the company, when it will be injected, and what happens if it isn't?
The parties nonetheless emerged from the meeting with a kind of achievement: they agreed to set up a team of three people from each side (IDB and the bondholders' representative) to hold talks.
In a separate development, Judge Orenstin dismissed a petition by HSBC Holding plc (LSE: HSBA; HKSE: 005; NYSE, Paris: HBC) for IDB Development to make a NIS 14.4 million due to it directly and not into a trusteee account, saying that this would violate the priciple of equality betwen creditors.
Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2013
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