Nochi Dankner's IDB Holding Corp. will try to raise additional capital through a share offering that would, in part, generate funds to pay NIS 35 million in principal owed to bondholders.
The firm released a shelf offering prospectus on Wednesday stating its intention to raise NIS 46 million through the issuance of about 2.5 million shares at NIS 18 per share.
The stock price is 10.7% less than IDB's opening price in trading on the Tel Aviv stock exchange Wednesday. The company is also offering purchasers of the new stock three option warrants for two company series at no additional cost. If all the options are exercised, the company would raise another NIS 323 million by the end of next year.
Shares of IDB Holding shot up 13.7% in trading on Wednesday after the release of the prospectus, about an hour before the close of trade. The shares gained another 4.7% on Thursday. Its short-term bonds gained 10% on the day and about 40% since the beginning of October.
Tzahi Sultan's Clal Underwriting will be handling the new share offering. The IDB group's Clal Finance has about a 10% stake in the underwriting company.
The shelf prospectus discloses a series of payments totaling NIS 76 million that various IDB group firms have made this year to companies controlled by Dankner's IDB partners Avraham Livnat, Yitzhak Manor and brothers Marc and Jacob Schimmel. As of the end of September, IDB's Super-Sol supermarket chain had paid about NIS 14 million, in connection with business dealings, to a subsidiary of Livnat's Maman Cargo Terminals and Handling. Super-Sol also leased cars from Prime Lease, which is controlled by Manor and his wife, Ruth.
The agreement provides for the lease of up to about 450 vehicles for up to about NIS 15 million per year before value added tax. Another IDB group firm, Cellcom, contracted with Tikshoov, a private firm controlled by the Livnat family, to provide call center services for about NIS 11 million.
The prospectus also disclosed business dealings with the Schimmel brothers, who are partners in Ganden Investments, through which Dankner controls IDB. IDB's Property and Building Corp. paid the Schimmels' Rock Real Partners company NIS 36 million this year alone. Over the years, IDB has regularly reported business dealings with the Schimmels involving tens of millions of shekels.
In other news related to the IDB group, the credit rating agency Midroog announced Thursday that it was lowering its credit outlook for Clal Insurance to "negative" following the insurance firm's announced intention to issue about NIS 300 million in bonds.
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