Nati Saidoff, a Los Angeles-based Israeli property investor, took an important step closer to winning control of Bezeq and becoming a major figure in the Israeli business scene after the bank creditors voted Monday to back his offer to buy Eurocom Communications.
The vote almost didn’t happen, after one small creditor won an order late Sunday from Tel Aviv District Court Judge Iris Lushi-Abudi delaying the process until Saidoff cleared up certain points in his bid. He did, and the creditors, which include Israel Discount Bank, Bank Hapoalim and First International Bank of Israel, went ahead.
Saidoff’s bid still faces two more major hurdles and the risk that the only other remaining bidders — a group comprising Tzahi and Chen Neuman and Brazilian investor Elie Horn — might yet sweeten their offer. In addition, Eduardo Elsztain’s Discount Investment Corporation, which withdrew from the bidding last week, left the door open to a return.
The first hurdle will come Thursday when the remaining creditors of Eurocom Group, among them the creditors of Eurocom Communications sister company Eurocom Real Estate, vote on the Saidoff offer. After that the offer goes back to Tel Aviv District Court, where Judge Eitan Orenstein will make the final decision.
The winner will gain control of Eurocom Communications in a bailout from Shaul Elovitch, the telecoms entrepreneur who has been ensnared in a growing investigation of alleged securities and, as of this week, criminal offenses.
Eurcom Communications controls Bezeq, Israel’s biggest telecommunications provider, through its 55% stake in publicly trade Internet Gold. Saidoff, or whoever else wins the bidding for Eurocom, will also get control of a 55% stake in satellite operator Spacecom; 15.2% of the alternative energy company Enlight and a 37.5% stake in the Midtown real estate project in Tel Aviv.
Saidoff’s offer calls for him to inject 376.5 million shekels ($107.3 million) into Eurocom Communications in exchange for convertible bonds. He also pledges to make another 25 million shekel payment within a year and add an additional 50 million if the value of Internet Gold rises to a range of 500 million to 700 million shekels.
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All that will whittle down Eurocom Communications’ debt to 350 million shekels, due in seven years.
In addition, he is committed to injecting 75 million shekels into Eurocom Real Estate to repay its creditors. The rest of Eurocom Real Estate’s debt, about 175 million shekels, will be recycled as a loan provided by Eurocom Communications’ creditor banks.