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Prime Minister Benjamin Netanyahu does not intend to provide state aid to so-called "tycoons" struggling to meet their debts.

This means the state will not rescue tycoons who cannot pay back bondholders, and holding companies including Lev Leviev's Africa Israel, Eliezer Fishman's Jerusalem Economic Corporation, the Ofers' Israel Corporation and Nochi Dankner's IDB group wouldn't be eligible for state aid to refinance their debts. (Not that they've asked for any, as Fishman points out - see Page 11.)

Netanyahu confidants say the new prime minister believes it's up to the tycoons to reach new agreements with their creditors, even if that means they have to forgo part of their holdings.

Over the next three years, corporate Israel needs to pay back about NIS 90 billion. This year alone they have to return about NIS 25 billion. In the normal course of business, they'd borrow fresh money to repay old loans. Theoretically they can do that by borrowing from the banks, or from investors through bond issues.

The problem is that in a credit crunch, that can be difficult to do.

The banks are clenching their fists, and investors, terrified that the big, debt-laden companies won't be able to repay debt in full (or at all), aren't exactly haring for new bond issues.

Netanyahu's 100-day transition team recommended the plan advocated by Zohar Goshen, the chairman of the Israel Securities Authority (see Page 11 for Goshen's rebuttal of criticism). Goshen proposes that the state provide guarantees to institutional investors, capping their loss on bonds of eligible companies at 20%. That would allow the institutionals (insurance companies, provident and mutual funds, pension funds and so on) to buy bonds, which would enable the companies to roll over their debts.

At first the transition team was opposed to granting aid to tycoons. But in its final recommendations, the group left a bit of wiggle room regarding who might be included in the guarantee program.

The transition team has stated that the new government will set the criteria for any such program.