US private equity firm KKR is holding talks with IDB Holdings for a mega loan of hundreds of millions of dollars, Calcalist has learned.
This is a dramatic move which, if it results in a deal, may solve a major portion of the corporation's debt problems.
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It is unknown which assets IDB will be expected to pledge as guarantees for the loan – possibly stock from IDB Development or from other IDB subsidiaries.
IDB Holdings is in the midst of a deep financial crunch and posted a going concern warning in its Q2 results for 2012. The company reported a mere NIS 198 million ($52 million) in cash, which will be just enough to meet its obligations only up to June 2013. After that the company will be short NIS 365 million ($95 million) to repay debt.
Currently, IDB Holdings owes bondholders NIS 1.7 billion ($450 million), and banks – NIS 300 million ($78 million). Until now it seemed that the company had little choice but to go for a debt restructuring agreement and a second bondholders meeting was called on October 1 to decide on measures the company should take.
IDB Development's bondholders have scheduled a meeting for Thursday to appoint representatives.
York Capital Management has obtained control over 20% of IDB Development's debt and is aiming at a takeover of the company; however, the talks with KKR, if they come to fruition, might throw a wrench into York's plans.
IDB declined comment.
This report was originally published in Hebrew
by Calcalist
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