TEL AVIV, July 7 Indebted Israeli conglomerate
IDB Holding presented to a Tel Aviv court a new
proposal for a debt restructuring after Argentinian businessman
Eduardo Elsztain backed out of a planned investment of $75
Elsztain's investment had been crucial to a previous debt
restructuring that IDB, which controls some of Israel's leading
companies, had presented to its bondholders.
"The company is holding talks with other investors," IDB
said in a statement to the Tel Aviv Stock Exchange on Sunday.
IDB Holding owes 2 billion shekels ($549 million) while its
unit IDB Development owes 5.8 billion shekels.
Bondholders have proposed a debt restructuring that would oust
IDB Holding Chairman Nochi Dankner and give them full control of
a combined company.
Under the new restructuring proposal, whose aim is to enable
Dankner to maintain control of IDB Holding, 841.5 million
shekels would be injected into the company while IDB Holding
debt holders would receive 54 percent of the shares in IDB
IDB Holding debt holders would also receive 175 million
shekels from the company's cash reserves and the bonds would be
erased from trading.
Shares in IDB Development would then be listed for trade.
"Debt holders in IDB Holding are expected to benefit from
the potential of an increase in the inherent value of the
company's assets, which are among the leaders in the economy,"
IDB said in a statement.
This is preferable to the alternative of selling assets as
part of a liquidation of the company or under pressure, it said.
IDB did not say from where the money for the restructuring
would come. The Globes financial news website said Dankner has
held initial talks with U.S. private equity funds KKR & Co
and Prudence Holdings regarding a $400 million loan.
IDB controls Cellcom, Israel's leading mobile phone
operator, supermarket chain Super-Sol and Clal
Insurance and its subsidiary Koor Industries
owns a 2.4 percent stake in Credit Suisse.
Many of the companies have been hard hit by a combination of
slowing economic growth and increased competition.
IDB's bond prices were down as much as 2.9 percent.