IDB Likely to Get More Time for Bailout Proposals
Proceedings delayed to enable potential new investors to get more information on IDB Holding subsidiary companies and allow Nochi Dankner time to put his own restructuring proposal into place
The fate of Nochi Dankner’s IDB Holding Corporation is likely to be put on hold for three weeks to give potential buyers of the beleaguered conglomerate time to make offers.
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Tel Aviv District Court Judge Eitan Orenstein will probably accept a petition from potential buyers next week to delay his October 20 deadline for submitting restructuring proposals to November 10. IDB Holding senior executives told Hagai Ullman and Eyal Gabbai - the two court-appointed officials overseeing the holding company - that the extra time was needed to enable new entrants to the IDB race, to conduct due diligence and to ensure an orderly sale process.
Because IDB is a holding company whose business is run through a wide array of subsidiaries in very different fields, the potential investors will need information on companies as diverse as Makhteshim Agan, Clal Insurance, Super-Sol and Cellcom Israel.
“The postponement will enable new contenders to enter the fray,” said a source close to the matter. “There are a number of contenders that are seeking more information and time to make their offers ... to simplify the issue and because it appears that the court will respond positively to the petition, all the parties involved agreed to act together.”
IDB Holding sits at the pinnacle of a holding group weighed down by some NIS 8 billion in debt to banks and bondholders that has made the company the object a range of bailout proposals - one from Dankner himself and the others from outsiders - that would swap much of the debt for equity. In August Orenstein set an October 20 deadline for proposals, hoping that would provide enough time for new bidders to emerge and for those who already made offers to organize and find financing for them.
Among the new possible bidders is a group of investors from the U.S., China, Hong Kong and Singapore led by Neil Bush, brother of former U.S. President George W. Bush, who emerged as a contender for IDB this week. The IDB executives said that Dankner and his partner, the Ukrainian businessman Alexander Granovsky, also need the extra time to get approval from shareholders in Granovsky's company, Emblaze, to move forward with their own restructuring plan for IDB Holding.
As part of Dankner and Granovsky's proposal, the latter would invest NIS 500 million in IDB Holding through Emblaze, a company he recently acquired.
Shares of IDB Holding rose 0.25% to NIS 6.70 in Tel Aviv Stock Exchange trading Thursday. IDB’s Series 4 bonds rose 1.59%.
The trustees representing IDB Holding bondholders were not invited to the meeting to discuss the postponement, said the source, because Argentinian businessmen Eduardo Elsztain, whose restructuring proposal they support, would like to see the proceedings move forward without delay. Elsztain already struck an agreement with the company's bondholders to invest NIS 770 million in the holding company, and has put $75 million into an escrow account in the meantime.