IDB Holding Corp, one of Israel's
leading conglomerates, has agreed on a settlement in principle with representative of its bondholders.
IDB, which has debt
of NIS 2.06 billion ($560 million), said on Tuesday controlling shareholders would inject NIS 500 million ($135.65 million) into the company, of which NIS 275 million ($74.6 million) will be paid immediately and the rest in five annual installments of NIS 45 million ($12.2 million).
Bondholders will receive a cash payment of NIS 405 million ($109.9 million) and 15% of IDB shares, with a current value of about NIS 80 million ($21.7 million). IDB Chairman Nochi Dankner will retain control of the company.
Bondholders will also receive four new bond series, totaling nearly NIS 1.6 billion ($430 million).
The settlement and the capital injection depend on a deal with Argentinian businessman Eduardo Elsztain, who last month bought a 10% stake in Ganden Investments, the parent company of IDB.
In September, Elsztain signed an agreement to invest $25 million in Ganden for 10% and received an option to invest another $75 million to raise his holdings to about 31%. Ganden is the private company through which Dankner controls IDB.
The IDB group, which has assets of $30 billion, controls Cellcom, Israel's leading mobile phone operator, supermarket chain Shufersal and Clal Insurance. Its subsidiary Koor Industries owns a 2.4% stake in Credit Suisse.
Elsztain is chairman and chief executive of IRSA, Argentina's biggest real estate company. He also serves as chairman of Cresud , a major agriculture producer.