August 26, 2013 / 8:37 AM / 4 years ago

Israel's IDB given 8 weeks to submit debt settlement

JERUSALEM, Aug 26 (Reuters) - An Israel court has given conglomerate IDB Holding an eight-week extension to submit a debt settlement as Chairman Nochi Danker fights to keep control of the company and prevent a takeover by bondholders.

The Tel Aviv District Court had been expected to rule on Sunday but a flurry of activity this past week convinced the court to give Dankner until Oct. 20. The court will make a final ruling on Nov. 25 after a Nov. 14 meeting of bondholders, according to court documents released on Monday.

Many of the companies IDB owns have been hit by slowing economic growth and increased competition. IDB Holding owes bondholders 2 billion shekels and IDB Development owes a further 5.8 billion shekels.

Bondholders of both companies have proposed a debt restructuring that would oust Dankner and give them full control of a combined company.

The court approved IDB unit IDB Development’s sale of a 32 percent stake in subsidiary Clal Insurance , Israel’s No. 2 insurer, for 1.472 billion shekels ($409 million) to Hong Kong’s JT Capital Management. It also urged the capital markets regulator to reconsider a decision to temporarily transfer control of IDB’s Clal Insurance shares to a trustee.

Dankner has partnered with Ukrainian businessman Alexander Granovsky, who plans to take over IDB by acquiring mobile technology firm Emblaze through investment firm BGI Investments and using its cash reserve.

Emblaze would inject 826 million shekels into IDB Holding, provided IDB first settles its obligations to its creditors. A new company would be set up that would be 70.3 percent owned by Emblaze and 29.7 percent by Dankner.

Separately, Argentine businessman Eduardo Elsztain is in talks with bondholders of IDB Holding to invest 770 million shekels in subsidiary IDB Development in exchange for a 50.5 percent stake. But the court at this time opted not to approve the proposal.

IDB controls Cellcom, Israel’s leading mobile phone operator and supermarket chain Super-Sol.

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