Nochi Dankner, who lost control of his IDB corporate empire to creditors in January, is now offering to sell his Herlizya Pituah villa and spend the rest of his life paying bankers some 400 million to 500 million shekels ($146 million) of personal debt, sources told TheMarker.
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The plan proposed by Dankner would require him to sell the suburban Tel Aviv home, estimated to be worth 40 million shekels, within 12 months to satisfy a portion of the debt. The proceeds would be part of an initial payment of 60 million to 70 million shekels toward 180 million shekels to be paid over the next five to eight years.
The proposal calls for Dankner, who is 59, to allocate 60% of whatever income he earns during the rest of his life to pay off the debt.
Although Dankners' terms still need the backing of the banks’ credit committees, they are likely to be approved in roughly their current form because the lenders have few other options. Dankner would not be the only tycoon to surrender his home to creditors; the Petah Tikva house of Motti Zisser, who once controlled the Elbit real estate group, is being sold by Bank Leumi to settle debts.
Dankner, who once stood at the apex of Israeli business with holdings including Israel’s biggest supermarket chain Super-Sol and cellphone company Cellcom, not only has huge debts to pay, he faces charges of share-price manipulation.
Apart from the proceeds from the sale of the house, it’s not clear what sources of income Dankner will have. Some of the money is expected to come from friends and his father, Yitzhak Dankner, who is thought to have several hundred of millions of dollars in assets.
After the banks failed to spot Dankner’s deteriorating finances, the debt-payment arrangement represents a face-saving effort for them as well.
Dankner’s debt to the banks stems from personal guarantees he provided through Tomahawk and subsidiary Ganden Holdings, two privately held companies he controlled. That left him with debts of about 150 million shekels to Bank Hapoalim, 120 million to Leumi and 100 million to Israel Discount Bank. He owes another 60 million shekels to Bank Mizrahi-Tefahot, 40 million to Credit Suisse and 10 million to Union Bank.