IDB Holding Offers New Debt Rescheduling Proposal to Bondholders

The proposal would give the bondholders NIS 350 million up front in cash to be distributed based on the agreement of bondholder representatives to holders of all of the series of IDB Holding bonds.

Nochi Dankner’s IDB Holding Corp., which owes its bondholders NIS 1.75 billion and its banks another NIS 300 million, proposed a new deal to bondholders at the end of last week.

Its latest proposal would give the bondholders NIS 350 million up front in cash to be distributed based on the agreement of bondholder representatives to holders of all of the series of IDB Holding bonds.

The cash would come from Ganden Holdings, Dankner’s privately held company through which he controls IDB Holding, as well as NIS 200 million that IDB Holding has on hand.

The proposal comes despite threats from bondholder representatives of IDB Development, a subsidiary of IDB Holding, to join forces with IDB Holding bondholders to wrest control from Nochi Dankner.

An integral term of the IDB Holding deal would commit Ganden to immediately give it NIS 200 million, plus another NIS 110 million to be paid over a period of years. In addition to the NIS 350 million in cash that the bondholders would get immediately, the company is proposing that the company’s current series of bonds which are currently trading at a collective market value of NIS 300 million be replaced by two new series to be worth NIS 1.25 billion.

One series would pay 5% interest. Those bondholders would begin getting their money back in five years, with a final redemption in 2024.

Under the terms of another series, bondholders would get principal and 5% interest in one lump sum payment in 2023. Bondholders would also get a 15% stake in IDB Holding stock and a negative pledge on all of the stock of its IDB Development subsidiary. This would bar the company from encumbering the stock without the creditors’ permission.

Argentine investor Eduardo Elsztain, who has expressed an interest in investing $75 million in Dankner’s private firm Ganden Holdings, is due to arrive in Israel this week, when he is due to meet with IDB bondholder representatives. He is expected to make it clear whether he expects to proceed with the investment in Ganden.

David Bachar