D-day for Delek Real Estate, as Bondholders Vote on Debt Accord

A 'no' vote seems likely, which means a court-appointed receiver will almost certainly be taking control of Yitzhak Tshuva's flagship property-development company next week

If controlling shareholder Yitzhak Tshuva doesn't get Delek Real Estate's bondholders to agree on a settlement in a vote called for Monday, a temporary receiver will be appointed next Sunday by Tel Aviv District Court Judge Varda Alshech.

That move would set the ball rolling for secured creditors holding additional company debt of over NIS 600 million - Bank Leumi, Bank Hapoalim, Israel Discount Bank, Mizrahi Tefahot Bank, Mercantile Bank and Phoenix Holdings (another Tshuva company ) - to appoint a receiver over its assets.

A preliminary vote held Thursday night on a proposal involving a 60% to 88% haircut failed to amass the necessary majority for a NIS 2.15 billion settlement.]

The vote followed a secret meeting held last Sunday between Tshuva, Delek Real Estate CEO Eran Meital and Edward Keller, the representative of the militant holders of NIS 600 million in series B25 bonds.

Keller proposed an overall cash settlement by Tshuva to replace the complicated multifold proposal on the table. Tshuva was apparently referring to such a deal when he offered to lay out NIS 500 million to NIS 550 million over a five-year span and erase the rest of the debt for a 75% haircut.

Delek urges investors to vote 'The market said its piece'

Tshuva needs to decide quickly whether to up his offer or go through with liquidation. But according to series B5 representatives, "The market said its piece and isn't interested in a settlement."

Delegates representing private bondholders said that "the settlement's collapse was unavoidable, and the results speak for themselves. Tshuva left us no choice. We have a set plan for the day after, whether the company goes into liquidation or negotiations continue."

Delek Real Estate responded that the settlement, contains a "significant and unprecedented contribution by Tshuva" amounting to hundreds of millions of shekels throughout the period of the arrangement.

"The company assumed, and still assumes, that the settlement alternative with all its components is better by a wide margin than liquidation," Delek said.

"Even the representatives [of the bonholders] opposing the arrangement sayd the value that bondholders would get is infinitesimal. There is still a chance for 70% of the bondholders who still haven't voted or expressed their opinion to utilize their rights to vote and make a decisive choice in favor of the settlement," the company said.