Hareidi businessman Elstein to arrive in Israel

Eduardo Elstein will arrive in Israel next week to try promote a further investment transaction in Ganden, a private company by which Nochi Dankner controls the IDB group.

The ransaction is the realization of the investment option for an additional $ 75 million in Ganden, after the Argentine Elstein already invested 25 million dollars in the company.

"We are aware of the challenges faced by the group, including debt settlement consolidation process in IDB Holdings, a move undertaken with our full knowledge and cooperation. Our representative is also regularly found at IDB headquarters in Israel and closely follows the procedure," the statement from Elstein's office in Argentina.

A statement issued today by Elstein, just before the start of a meeting for holders of IDB Development bonds, said that, "We are convinced that through negotiations conducted between IDB Holdings, its shareholders and debenture holders one can find a fair solution which will serve the best interests of the company and its creditors and will enable IDB management to stabilize the company and return to a path of growth and profitability. We are working to increase our investment in Ganden and IDB Group and next week Mr. Eduardo Elstein is expected to arrive for another visit to Israel to promote the deal."

Earlier this week "Globes" revealed that Dankner intends to make an improved offer to bondholders after they increased the pressure and are threatening to go to court to force debt settlement of combined IDB Holdings and IDB Development, which will lead to the transfer of controlling of the concern to bondholders, led by the York Fund. The process is led by Jeremy Blank, representative of York Investment Fund in Israel, which bought 20% bonds of IDB Development, comprising 800 million of nominal value.

The latest proposal by IDB Holdings for debt settlement, given to the mission of bondholders on January 23, included a "haircut" of about 600 million shekels for bond debt (currently at 1.8 billion). The outline included the issuance of a new series of bonds totaling 1.4 billion shekels, at low-interest and long deployment, allocation of 10% of the shares of the subsidiary of IDB Development and an immediate injection of 140 million shekels to the company by the investor Elstein.

An additional amount of NIS 120 million will flow to the company, according to the proposed settlement, in two phases - half after two years from the date of signing of the agreement, and the balance after two years. This discharge will be deleted against debt bonds of NIS 390 million, and if the discharge is not executed, the debt holders will be given 41% of the shares of the subsidiary IDB Development (so that they hold control of 51% of the subsidiary, after on the date of signing of the agreement, share holders will receive 10% of its bonds).

The bid indemnified by Dankner is not expected to include extra cash settlement, but a larger amount of IDB shares and holdings which bondholders will receive.

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