Bondholders want guarantee from Tshuva
Delek Real Estate 25-Series bondholders decide to reject company's request to bondholders to appoint representatives to negotiate postponement of principle repayment
The decision was made unanimously by the participants of the bondholders meeting immediately after the company representative left the hall with bondholders conditioning negotiations on Tshuva immediately providing a NIS 180 million ($52 million) guarantee on the bond repayment.
Calcalist learned that the large group of the Series 25 bondholders have no intention of appointing a representative, rather they intend to lead the dispute directly to court and petition either for a receiving order or for Delek Real Estate's liquidation, as a provision in the event that Tshuva fails to put up guarantees for the balance within the next three weeks, until the repayment of half the debt to the Series-25 bondholders.
The bondholders' meeting was held yesterday with the attendance of Delek board member and personal assistant to Tshuva – Idan Wallace and DGRE CEO Eran Meital. Meital attempted to hold a presentation but was interrupted by bondholders. In stark contrast, representatives of institutional bondholders remained blatantly silent throughout the meeting.
Calcalist has learned that in an attempt to assuage bondholders' concerns Meital reassured them that they share the same interests and in a review of the chain of events leading to the current predicament, he raised the issue of subsidiary Elad Residence which was supposed to be sold for approximately NIS 400 million ($116 million) but now Delek is requesting to hold off on the sale in order to examine the betterment of the company's assets.
"The company is going to merge with a strong real estate body together with which we will try to hike our asset value beyond that expected from a sell-off."
"The company cannot repay short-term debt," said Meital. "Any payment now means preference of certain creditors. We are seeking a repayment solution acceptable to all parties." Meital said that the company has been endeavoring to find a solution for quite a while.
Calcalist has learned that Meital informed bondholders that Tshuva asked him represent him at the meeting and that Tshuva seeks to appoint former Bank Discount chairman Shlomo Zohar as his representative to the negotiations vis-à-vis bondholder representatives.
The bondholders' representative, attorney Gay Gissin, tried to disprove some of the explanations Meital offered in his presentation. He questioned discrepancies between the company's projected cash flow from last May and the one presented by Meital. He further demanded the company publicize the legal opinion stating that it cannot fill its financial obligations.
Delek Real Estate responded that "the company is waiting until the Series 25 bondholders appoint representatives in order to engage in negotiations over a short postponement the company is seeking in order to formulate a debt repayment scheme."
Raheli Bindman and Leroy Peri contributed to this report
Click here to read this report in Hebrew
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