Court Gives Beleaguered Tycoon Week to Find Investor

Or the bondholders can hold meetings as they please; Nochi Dankner had hoped to stave off their conference.

Send in e-mailSend in e-mail

The Tel Aviv District Court on Sunday morning denied a request from Nochi Dankner, holder of the controlling stake in the IDB business group, to postpone upcoming meetings by the group's bondholders. Judge Eitan Orenstin ruled, however, that if bank guarantees totaling NIS 430 million were placed in trust by a prospective group of investors before August 25, subsequent bondholder meetings would be postponed.

NIS 70 million of the sum would be forfeited to creditors if a deal with the group doesn't materialize, the judge said.

IDB Holding owes its bondholders NIS 2 billion, while subsidiary IDB Development owes bondholders NIS 5.8 billion. Bondholders were due to meet Sunday and Wednesday of this week to choose a plan for a debt settlement.

Meanwhile, Dankner is working on a deal with Ukrainian businessman Alexander (Sasha) Granovsky to keep bondholders from seizing control of the conglomerate. A previous deal to bring in Argentine investor Eduardo Elzstain recently fell through, as did an attempt to sell IDB's stake in Clal Insurance to a Thai investor.

IDB's request shouldn't be rejected outright, said Orenstin in his decision, noting that Granovsky's proposal could take shape as a binding offer promising creditors more than existing offers. "The company did not sit idle but acted to recruit investors in order to offer a creditors' arrangement of its own," he wrote, explaining why he permitted a limited extension for reaching a settlement. He added that the fact that negotiations with Elzstain failed very recently without leaving the company much time to find other investors should be counted in IDB's favor.

An ultra-Orthodox Jew, Granovsky, 41, was born in Uman in the Ukraine and studied law at Odessa University before entering the construction industry. In 2001 he started becoming religious and joined the Chabad movement in the Ukraine, while also becoming associated with leading figures in the Ohr Avner organization, including Lev Leviev, controlling owner of the Africa-Israel group. Granovsky is considered a close friend of Odessa's chief rabbi Abraham Wolf.

Between 2002 and 2006 Granovsky served in the Ukrainian parliament, where, through his budgetary responsibilities, he forged ties that later would prove useful in his business dealings. He also served as vice-president of the Football Federation of Ukraine.

Granovsky made his first splash on the Israeli business scene a year ago when, through the charity foundation Chabad 770, he acquired control of ZBI from Zvi Barenboim for NIS 128 million. ZBI subsidiary BGI Investments owns 20% in Emblaze, with an option to increase its stake to 47%. Granovsky will be trying to get his hands on Emblaze's ample cash holdings of about NIS 500 million in order to execute a deal giving him control of IDB.

But before winning control over IDB subsidiaries Clal Insurance and Cellcom, Granovsky will need to meet with approval from the finance and communications ministries respectively. The entire process, including court proceedings concerning IDB's creditors and ownership, could take as long as six months.

Nochi Dankner still wants to control IDB.Credit: Olivier Fitoussi

Click the alert icon to follow topics:



Automatic approval of subscriber comments.
From $1 for the first month

Already signed up? LOG IN


The Orion nebula, photographed in 2009 by the Spitzer Telescope.

What if the Big Bang Never Actually Happened?

Relatives mourn during the funeral of four teenage Palestinians from the Nijm family killed by an errant rocket in Jabalya in the northern Gaza Strip, August 7.

Why Palestinian Islamic Jihad Rockets Kill So Many Palestinians

בן גוריון

'Strangers in My House': Letters Expelled Palestinian Sent Ben-Gurion in 1948, Revealed


AIPAC vs. American Jews: The Toxic Victories of the 'pro-Israel' Lobby

Bosnian Foreign Minister Bisera Turkovic speaks during a press conference in Sarajevo, Bosnia in May.

‘This Is Crazy’: Israeli Embassy Memo Stirs Political Storm in the Balkans

Hamas militants take part in a military parade in Gaza.

Israel Rewards Hamas for Its Restraint During Gaza Op