Dankner stands to lose control of IDB
IDB Holding's bondholders back out of Elsztain settlement, sign deal with IDB Development bondholders that will see chairman Nochi Dankner losing control of conglomerate
Drama at IDB: Representatives of the IDB Holding Corp's bondholders are backing out of a deal that would have seen Argentinean businessman Eduardo Elsztain investing $75 million in the debt-strapped Israeli conglomerate.
Following a late night meeting, IDB Holding bondholders signed a consolidation agreement with IDB Development bondholders which will likely see Chairman Nochi Dankner losing control of the group.
Dankner had recently reached a deal with Elsztain that would have seen the two jointly controlling IDB parent company Ganden Investments, in which Elsztain would hold 30.77%. Elsztain would also get the right to become vice chairman of IDB.
IDB Development bondholders, led by York Capital Management, have agreed to give IDB Holding bondholders 10% of IDB Development stocks if and when the bondholders take over the company. The remaining 90% will be handed over to IDB Development bondholders.
The bondholders, including Excellence Nessuah Investment House, Psagot Investment House, Gilad, York Capital Management and Phoenix Insurance, said that as part of the new debt settlement, 100% of IDB Development capital stock will be handed over to the two companies' creditors. IDB Development's debt will be reallocated.
It was further stated that as part of the deal, IDB Development will effectively become one traded company controlled by the two companies' creditors.
York Capital's Jeremy Blanc now stands to be IDB's biggest shareholder.
IDF Holding's bondholders felt they were waiting too log for Elsztain's investment and opted to take Blanc's proposal.
The deal is yet to be approved by a court and is expected to face Danker's fierce opposition.
