(photo credit: REUTERS/Amir Cohen)
IDB Group bondholders reached an agreement overnight Thursday that may oust
Nochi Dankner from controlling the Israeli conglomerate, which controls
companies such as Cellcom and Shufersal.
The bondholders from two tiers
of the pyramid conglomerate, IDB Holdings and IDB Development, agreed to convert
bonds to stocks and merge the two companies, thus wresting control from Dankner.
IDB Development bondholders are to write off NIS 1.8 billion of its debt and get
90 percent of its shares.
IDB Holdings bondholders are to get 10 percent
of the new company’s stock, which will be still be called IDB Holdings, plus the
NIS 200 million in cash the company currently holds.
The deal needs court
approval to move forward, but the united front is bad news for
The bondholders are reportedly seeking court approval to appoint
Eyal Gabbai, a former director-general for the Prime Minister’s Office, to
replace him in running the company.
Dankner denied that he lost control
of IDB, and told Channel 2 on Friday that he does not intend to resign, and that
he will make a better proposal than the “wrong and misguided” one made by
“I did not lose control. It is true that there was a
proposal this morning, but I don’t know what they wanted to achieve with it,” he
IDB issued a statement saying that bondholders’ agreement would
lead to “a dramatic ‘haircut’ to the bondholders and an enormous destruction of
It vowed “to act against the peculiar and distorted move” and
offer a much better proposal.
A series of investments gone sour in recent
years put the company in a precarious position, leaving Dankner to seek debt
settlements with the bondholders, investment from Argentinean billionaire
Eduardo Elsztain and debt forgiveness from banks.Jerusalem Post staff
contributed to this report.