JERUSALEM Feb 12 Argentinian businessman Eduardo Elsztain bought a 10 percent stake in Ganden Investments, the parent company of debt-strapped Israeli conglomerate IDB Holding Corp.
Terms were not disclosed but in September, Elsztain signed an agreement to invest $25 million in Ganden for a 10 percent stake. He also received an option to invest another $75 million to raise his holdings to about 31 percent of Ganden.
The deal comes as IDB and its units have been selling off assets to raise much-needed cash to reduce its hefty debt.
Elsztain said on Tuesday the investment in Ganden - the private company through which IDB Chairman Nochi Dankner controls IDB - comes despite challenges facing IDB, including a bitter debt settlement process.
"We are convinced that through negotiations between IDB Holding, its shareholders and debt holders, a fair solution can be found that serves the best interests of the company and its creditors and enables IDB's management to stabilise the company and return it to a path of growth and profitability," Elsztain said in a statement.
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 percent stake in Credit Suisse.
Separately, Discount Investment Corp, a unit of IDB, said on Tuesday it sold a 1.7 percent stake in Cellcom for 46 million shekels ($12 million) to trim its holdings to 41.9 percent. It also sold 2.8 percent in Koor for 65 million shekels and 2.6 percent of real estate developer Property & Building for 30 million shekels.
Elsztain is chairman and chief executive officer of IRSA , Argentina's biggest real estate company. He also serves as chairman of Cresud , a major agriculture producer with 35 farms and 1 million hectares under management in Argentina, Brazil, Paraguay and Bolivia.
Elsztain said he was working to expand his investment in Ganden and IDB and will visit Israel next week to advance the deal.
($1 = 3.70 shekels) (Reporting by Steven Scheer)