Nochi Dankner, an embattled tycoon and the controlling shareholder of IDB Holdings, is removing his own parents from IDB Holding Corporation. After his mother Goldie resigned from the company's board of directors, Dankner purchased 455,000 shares off of his father Yitzhak. The deal, worth NIS 5 million, was not listed on the stock exchange. Yitzhak Dankner still holds 925,000 of the corporation's shares.
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IDB Group is Israel's largest diversified business conglomerate. But IDB Holding is drowning in debt of late, with NIS 1.7 billion owed to the banks. In attempt to keep it head above water, IDB Holding recently offered bondholders a deal that which would restructure payments to be spread out over 15 years. Without new guarantees, interest rates of 2% to 4% were offered, which don't really reflect a corporation in crisis.
IDB is also waiting by the phone, hoping to hear from Eduardo Elsztain on an offer to invest a further $75 million in Ganden Holdings, the controlling shareholder of IDB.
Since bondholders rejected the debt restructuring offer, the company will continue searching for another arrangement. Senior executives, who are currently overseas, will have to find ways to give bondholders extra security, while ensuring cash flow from controlling shareholders to company coffers.
In addition, controlling shareholders will have to contend with claims made by IDB Development bondholder representatives, who have suggested improper corporate governance in the group. They are also juggling with demands that managers and board members start raising external funds to augment the company’s cash reserves, ahead of impending repayment of NIS 4.2 billion to bondholders and NIS 2.1 billion to the banks