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.
Heads of KKR met with IDB owner Nochi Dankner in London, New York and Tel Aviv on several occasions to formulate the deal, which may amount to more than NIS 1 billion (about $260 million).
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