Moti Ben-Moshe, who lost control of Israel’s biggest conglomerate IDB Group to his partner Eduardo Elsztain, is back on the Israeli business scene after winning bondholder backing for his bid to buy Alon Blue Square.
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The retail and energy company’s bondholders have voted nearly unanimously to hold exclusive talks with Ben-Moshe.
His current offer includes paying 115 million shekels ($29 million) to parent company Alon Israel and Alon Retail for a 72.7% stake in Alon Blue Square. He has also proposed an immediate 600-million-shekel cash injection into the company, and an immediate paying off of 300 million shekels of the company’s 932 million shekels in debt.
Ben-Moshe has also committed to pay back within 90 days any creditors who choose that option, in exchange for a 2.5% fee, and to pay 6% interest to bondholders who wish to remain bondholders.
The bondholders voted against a proposal to force the company to immediately pay them 380 million shekels in debt.
But the overwhelming support of the bondholders does not guarantee that the deal will go through; series A bondholders of Alon Israel object to the deal. Alon Israel is also a creditor of subsidiary Mega, Israel’s second-largest supermarket chain.
Mega’s trustees demanded that Alon Blue Square inject 700 million shekels into the company as part of a creditor agreement sealed in June.
A sale of a controlling stake in Alon Blue Square would pave the way for a debt agreement as it would nearly guarantee that creditors would receive all their money. The company owes bondholders 380 million shekels and banks 552 million shekels.