Scailex Corporation cast uncertainty over the future of its operations in a notice put out Wednesday, explaining that talks with an unnamed investor for a cash injection broke down following the rejection of a debt restructuring by its parent company’s bondholders.
“The continuation of our operations as a going concern is in doubt, and we’ll be summoning a bondholders’ meeting to discuss the implication,” the notice said. “We conducted negotiations with a third party that could have had significant positive influence on cash flow, but the condition for the funding was a debt restructuring for Suny.”
Scailex is 79% owned by Suny Electronics, which in turn is 73% owned by Ilan Ben-Dov.
On Wednesday Suny bondholders rejected any postponement of payment of principal and interest scheduled for April. As Suny hasn’t the means to pay bondholders, Ben-Dov stands to lose his control over the company, along with his control of Scailex. Scailex claimed that a change in controlling ownership could have an impact on its ability to finance its debt or to sell or mortgage part of its Samsung cellphone import and sales operations.
Scailex also retains a partnership interest in Partner Communications, the cellular service company that does business in Israel under the Orange brand, after relinquishing most of its stake in the company early this year to Israeli-American entertainment mogul Haim Saban. Scailex added that it won’t be receiving a dividend from Partner. Scailex is expected to ask bondholders to accept postponement of a NIS 62 million payment due at the end of this month.