Mizrahi-Tefahot Bank Begins Foreclosing on Fallen Tycoon's Debt

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Mizrahi-Tefahot has become the first Israeli bank to foreclose on collateral for debts owed by Israeli tycoon Nochi Dankner’s privately held company Ganden Investments, the bank confirmed through a spokesperson.

In recent trading, the bank sold shares that had been held by Ganden Investments, through which Dankner once maintained a controlling stake in IDB Holding Corporation, the spokesperson said.

The move comes about two weeks after Dankner lost control of the IDB group, the biggest conglomerate in Israel. IDB Holding Corp., which sits at the apex of the IDB pyramid and owes some 300 million shekels to Bank Leumi, Credit Suisse and Mizrahi-Tefahot, reported to the Tel Aviv Stock Exchange that 2% of its shares had been sold by the latter bank for 1.5 million shekels.

The bank had received the shares as collateral from Ganden, and is said to retain another 5% of IDB Holding shares that were also provided as collateral. Ganden’s total debt to Mizrahi-Tefahot is estimated at 80 million shekels.

A greater number of IDB Holding shares – 30.7% of the company – is held by Bank Leumi as collateral on Ganden’s debt, but that bank has yet to take steps to recover the debt. Ganden owes Leumi an estimated 450 million shekels.

Mizrahi-Tefahot's next step is expected to be the start of legal proceedings to collect on personal guarantees made on Ganden’s debt by the company’s shareholders, namely Dankner and his sister Shelly Bergman, who earlier this month sold some of her stake in IDB Holding.

Nochi Dankner.Credit: Moti Milrod

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