Chairman Nochi Dankner has promised to do everything in his power to save IDB Holding Corp. after the conglomerate attached a “going concern” warning from auditors to its second quarter financial report.

A warning of this type indicates that there are doubts as to a company’s continued solvency.

IDB recorded a net loss of NIS 1.27 billion in the second quarter, compared with a loss of NIS 883 million in the corresponding period last year, the company reported Friday.

Accountants BDO Ziv Haft and KPMG Somekh Chaikin expressed doubt over the company’s ability to repay all its debts, indicating that it may be facing bankruptcy.

S&P Maalot immediately downgraded its rating for IDB bonds to CCC from BBB-, citing a continuing decline in the level of liquidity and a rising fear of insolvency within a year.

Shares in the company plunged as much as 10 percent in early-morning trading but recovered to finish at NIS 14.01, a decrease of 2.1%.

In light of the report, Dankner decided to give up half his monthly salary for one year from September 2012. Senior IDB development staff will see their salaries decrease by 10- 15% in the same period.

“We are going through difficult times. This is not easy for any of us, but I believe and am confident we will emerge from this crisis stronger and looking forward,” Dankner wrote in a letter to staff on Friday. “IDB Holding has sufficient cash reserves to meet its debt payments for close to a year. The challenge we face is to substantially increase liquidity.”

Promising to do “whatever is necessary” to protect the money of investors and the rights of bondholders and shareholders, Dankner said IDB would act to inject capital, sell assets and continue to streamline and cut expenditure. He went on to list several measures his company had taken in the past year to fill its cash reserves, including the sale of Makhteshim Agan to ChemChina.

After expressing confidence that new investment partners would be found soon, Dankner concluded with a personal message to everyone currently involved with IDB.

“All of us – employees, managers, various stakeholders, bondholders, and shareholders – have a shared purpose: to create a work environment of goodwill in which the company will continue to operate strongly to get through the present crisis. In the past, we have known how to deal with crises through determination, devotion, and sacrifice. We will do the same this time.”

IDB Holding Corp. appointed Avital Bar-Dayan as vice president of investor relations on Sunday. Bar- Dayan, who leaves her position as VP of the Midroog rating agency, said she intended to play a role in measures taken by the company, “with an emphasis on strengthening relations within the capital and debt markets.”

Finance Minister Yuval Steinitz downplayed concerns over IDB and a subsidiary, Clal Insurance, during the weekly cabinet meeting, explaining that the Treasury’s Capital Markets Division had been following developments for the past few months.

“The possibility of damage to pensions is less than one in a thousand, and therefore we do not see – even in the worst case scenario – fundamental damage being done to the pension savings of Israeli citizens,” Steinitz said.

According to the Capital Markets Division, Clal Insurance is “a leading, profitable and stable company with strong management” that easily meets the Treasury’s requirement of maintaining high capital reserves.

Labor Party chairwoman Shelly Yacimovich slammed Steinitz over his comments, accusing him of a complete lack of understanding of the capital market and of characteristic disregard for the “miniscule income of working people.”

However, she commended Dankner for differentiating himself from other powerful businessmen, pointing out that he is attempting to sell assets and attract investors rather than requesting a haircut from bondholders.

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