Argentinian businessman Elsztain eyes stake in IDB Development
TEL AVIV Aug 20 (Reuters) - Argentine businessman Eduardo Elsztain is in talks with bondholders of IDB Holding to invest 770 million shekels ($216 million) in the debt-strapped conglomerate's subsidiary IDB Development in exchange for a 50.5 percent stake.
The rest of Israel's IDB Development would be distributed to IDB Holding's bondholders, according to the Globes financial newspaper.
Last month Elsztain backed out of a planned investment of $75 million in IDB Holding that had been negotiated with IDB Holding Chairman Nochi Dankner, who is struggling to retain control of the conglomerate.
Elsztain's current offer, made without Dankner, includes a $75 million immediate payment and a $25 million payment within 14 days of court approval of the offer, according to a statement issued on Tuesday.
Once the deal is closed, Elsztain would become chairman of IDB Development (IDBD).
"The investor (Elsztain) acknowledges that raising capital in IDBD is of the utmost importance," the statement said. "The raising of such capital may be by selling all or part of IDBD's holdings in Clal Insurance Enterprises Holdings or by other means."
The proposed investment by Elsztain is less than what Dankner last week offered bondholders in an agreement with mobile technology firm Emblaze that would see an injection of 826 million shekels in IDB.
Israeli news website Calcalist reported that representatives of IDB Holding bondholders favour Elsztain's offer.
On August 25, a Tel Aviv court is due to decide on the fate of the IDB Group.
Many of the assets IDB owns, which include some of Israel's biggest companies, have been hit by slowing economic growth and increased competition. IDB Holding owes bondholders 2 billion shekels and IDBD owes 5.8 billion.
Bondholders of both companies have proposed a debt restructuring that would oust Dankner and give them full control of a combined company.
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