Nochi Dankner 311.
(photo credit: Courtesy)
Ganden Holdings Nochi Dankner said Saturday he is optimistic that a debt
settlement can be reached with Bank Leumi despite the bank’s Friday decision not
to forgive NIS 150 million of the holding company’s debt following a public
outcry over the deal.
“We are convinced that with the banks, too, we will
reach a fair and appropriate outline – one that shall be agreed upon,” he wrote
in a letter to employees of IDB Holdings, a conglomerate that is a subsidiary of
Ganden must reach a debt deal with Leumi and Mizrahi Tefahot
Bank, Ganden’s second biggest creditor, in order to receive a $75m. from
billionaire Eduardo Elsztain. In February, Elsztain agreed to invest in the
company on the condition that Dankner reach debt settlements with both its
bondholders, which he did in March, and the banks.
In his letter, Dankner
promised that the deal with Elsztain remained “valid and in effect” despite the
latest obstacle to the debt-ridden company.
On Friday, Finance Minister
Yair Lapid announced that he and Bank of Israel Gov. Stanley Fischer had agreed
to establish a committee to oversee debt issues in the economy and make
recommendations to their respective institutions. The committee’s makeup will be
decided later in the week.
Bank Leumi said it would suspend a debt
arrangement with Ganden while the deal is reviewed by regulators.
light of the statement by the supervisor of banks that it is examining the
matter, the bank has decided to suspend implementation of the debt arrangement
until the review is completed, and will act according to the results,” Leumi
said in an emailed statement.
The regulator acted in response to media
earlier today that Leumi would forgive NIS 150m. of Ganden’s debt and that other
banks would forgive additional amounts. The Knesset Finance Committee announced
that it will hold a meeting on Tuesday to discuss “debt arrangements made by
banks with tycoons.”
“The matter is being examined by the supervisor of
banks,” the Bank of Israel said in a text message sent to journalists. “The
guiding principle behind the review is to make sure that the bank operated
properly, according to proper procedure, when the credit was given, during its
management, and if necessary, during the making of the debt
Opposition leader Shelly Yacimovich (Labor) and Meretz
chairwoman Zehava Gal-On expressed satisfaction at Bank Leumi’s decision.
Yacomovich said the deal cancellation is “a great victory of the Israeli
“It turns out the public is not apathetic, not asleep, is
intelligent and understands when injustice and irrationality cry out of a debt
arrangement,” Yacimovich said.
“This is an important move that shows
tycoons that our eyes are opened and we will not accept dubious deals that are
hatched covertly in the upper class club,” Gal-On said.Bloomberg and Jerusalem Post staff contributed to this report.