Delek Real Estate nears bondholders settlement

Bondholders are still deliberating, though, whether to accept or reject the offer.

January 25, 2012 22:38
1 minute read.
The Jerusalem Post

yitzhak tshuva 311. (photo credit: Delek group via Bloomberg)


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Trading in Delek Real Estate Ltd. shares was halted Wednesday morning following a report by the company that it will publish clarifications concerning negotiations with its bondholders.

Before trading was stopped, company share and bond prices had sharply risen in pretrading, as the company nears a settlement with its bondholders. However, the company subsequently issued a statement insisting that it has not yet reached agreement with bondholders.

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Over the last few days, Delek Real Estate controlling shareholder Yitzhak Tshuva has significantly increased his contribution to the company’s debt settlement. He said he is willing to inject NIS 500 million within nine years, to provide NIS 400m. in collateral for 16 years, and to forgive a NIS 83m. company debt due him for bonds that he holds.

Bondholders were requested to erase NIS 2.1 billion in bonds that they hold, and to receive in their place NIS 1.3b. worth of two new bond series. The granting of collateral is conditional upon the lending banks’ approval.

With respect to the flow of capital, Tshuva would be waiving NIS 1b. worth of bonds and collateral. Bondholders are still deliberating, though, whether to accept or reject the offer.

The company is simultaneously preparing to receive a negative answer from uninsured creditors, and has already completed the preparation of relevant legal documents needed to request a stay of proceedings from the court.

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