Bank Hapoalim is negotiating with the Supervisor of Banks a long-term spread of its provisions for specific debts that it is required to pay for excess credit to controlling shareholders in the bank.
Last week, Bank Hapoalim reported that its excess credit stands at NIS 1.6 billion. According to an arrangement reached with the supervisor about two years ago, the bank was supposed to have wiped out its excess credit to controlling shareholders by the end of February 2002.
Under the terms of that arrangement, it was agreed that Partner Communications, whose shareholders include Matav Cable Systems Media and Eurocom, would pay back by the end of February a $96 million loan that it took from Bank Hapoalim. Matav and Eurocom are owned by the Arison and Dankner groups, which control Bank Hapoalim.
Yesterday, Partner announced that it had received a one-month extension, authorized by the Bank of Israel, to repay the loan. During the next month, Partner's controlling shareholders will try to find alternative finance to the credit extended by Bank Hapoalim. The company is experiencing difficulty in raising credit from the Israeli banking system, because of the banks' heavy exposure to the communications sector, which forced them to carry out provisions for doubtful debt and tighten up criteria for extending new loans to the sector.
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