Elsztain to invest $75M in IDB, Ganden
Deal with Argentinean businessman comes as Nochi Dankner's company, its units have been selling off assets to raise cash to reduce hefty debt
Elsztain will invest $57 million in IDB and $18 million in Ganden, IDB said on Sunday. In February, he had bought a 10% stake in Ganden for $25 million.
The deal comes as IDB and its units have been selling off assets to raise much-needed cash to reduce its hefty debt. IDB has been facing a difficult debt settlement process with its bondholders.
At the same time, Bank Leumi last week terminated a NIS 150 million ($42 million) debt forgiveness deal with Ganden.
Elsztain and IDB Chairman Nochi Dankner will meet this week to try and quickly finalize the deal, which is conditioned upon reaching a final debt settlement with IDB Holding's bondholders and needs the approval of its bank lenders.
IDB Holding last month reached a settlement in principle with representatives of its bondholders and the company said any changes could lead to the deal with Elsztain being cancelled.
As part of the deal, Dankner and Elsztain would jointly control Ganden, in which Elsztain would hold 30.77%. Elsztain would also get the right to become vice chairman of IDB.
The IDB group, which has assets of $30 billion, controls Cellcom, Israel's leading mobile phone operator, supermarket chain Super-Sol 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.
