JERUSALEM, Jan 5 (Reuters) - A Tel Aviv court on Sunday upheld an earlier decision approving the transfer of control in debt-ridden conglomerate IDB Holding Corp to Argentinian businessman Eduardo Elsztain and his Israeli partner Moti Ben-Moshe.
Judge Eitan Orenstein, though, delayed the transaction to allow IDB’s chairman and current controlling shareholder Nochi Dankner time to appeal. Dankner has 15 days to file an appeal.
A month ago, the group won support from 75 percent of the votes of bondholders and bank creditors to take over. Orenstein approved the vote but ordered an investigation into the relatively unknown Ben-Moshe’s sources of financing.
“There is no evidence that would pull the ground out from under the approval given to the creditors’ arrangement, which received the support of the required majority of creditors,” Orenstein said. “Therefore, it is determined that the conditions for the court ruling to take effect have been met.”
The decision likely puts an end to a high-profile battle over who will head IDB, which through its pyramidal structure controls some of Israel’s largest companies.
Trade in IDB’s stocks and bonds were halted just before the court’s decision at 1100 GMT. Prior to that, IDB Holding’s shares were up 25 percent.
IDB expanded rapidly over the past decade under Dankner, whose rival proposal was rejected by creditors, but has been hit by slowing economic growth and increased competition.
IDB Holding owes bondholders 2 billion shekels ($570 million) and its subsidiary IDB Development owes a further 5.8 billion.
IDB, which controls Cellcom, Israel’s biggest mobile phone operator, and leading supermarket chain Super-Sol , has been selling off stakes in assets like Given Imaging, MA Industries and Credit Suisse, to raise cash.
Elsztain is chairman and chief executive of IRSA, Argentina’s biggest real estate company. He also serves as chairman of Cresud , a major agriculture producer. He initially supported Dankner during the debt restructuring, but in July backed out of the partnership.
Elsztain and Ben-Moshe’s proposal included a cash injection of 650 million shekels into IDB Development and a 300 million shekel payment, along with the allocation of 46.7 percent of IDB Development, to creditors.
$1 = 3.5071 Israeli shekels Reporting by Steven Scheer and by Tova Cohen