While businessman Eduardo Elsztain is fighting in court to retain control over IDB Development Corporation Ltd. (TASE:IDBD), former controlling shareholder Nochi Dankner has signed a debt arrangement with the banks at the offices of Adv. Lipa Meir, sources inform "Globes."
Dankner's personal debt to six banks totals NIS 480 million, consisting of loans from private companies Ganden and Tomahawk, through which he formerly controlled IDB. The two companies debts to the banks are estimated at over NIS 800 million, and the sum mentioned in the debt arrangement is less than NIS 500 million the amount of Dankner's personal guarantee for the debt.
According to the arrangement, Dankner will vacate his home in Herzliya Pituah within 35 days, and will be obligated to sell it within a year to someone outside his family. Furthermore, Dankner will have to pay the banks NIS 150 million within five years: NIS 70 million in the first year, including NIS 30 million on the credit arrangement signing date, NIS 20 million within three years, and NIS 60 million within five years. The remainder of the debt will be paid according to Dankner's future income, not on any specific date.
Dankner's debt settlement saga has been going on for more than two years. The banks were very eager to finish it, even at the price of eventually receiving only a small fraction of the debt. Dankner does not have many personal assets, and his wife, Orly, owns 50% of their Herzliya home, the estimated value of which is NIS 40-50 million. Dankner is slated to sell the house over the coming year and give the banks half of the proceeds. His wife will retain the other half.
Bank Hapoalim (TASE: POLI) holds the largest guarantee from Dankner - NIS 150 million, following by Bank Leumi (TASE: LUMI) with NIS 120 million. In addition to Dankner's guarantee, Bank Leumi also has guarantees from other Ganden shareholders: Avi Fischer, the Schimmel brothers, and Dankner's sister, Shelly Bergman, Dankner's sister, who has already paid the bank NIS 25 million.
Dankner has also given personal guarantees of NIS 100 million to Israel Discount Bank (TASE: DSCT) and NIS 60 million to Mizrahi Tefahot Bank (TASE:MZTF). He also owes Credit Suisse NIS 40 million and Union Bank of Israel (TASE: UNON) NIS 10 million.
It was important to the banks to reach an agreement that included Dankner's selling the house. The banks also did what they could to keep the word "write-off" from appearing in the debt settlement. Dankner is unable to repay his full debt, however, or even most of it, and an "elegant solution" was therefore found in the form of long-term rescheduling, i.e. for the rest of his life, even if the actual chance of Dankner repaying the entire debt is extremely small.
Published by Globes [online], Israel business news - www.globes-online.com - on June 8, 2016
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