All IDB Development Corporation Ltd. bondholders, of both short and long-term bonds, have authorized their representative to go head-to-head against the company's management. The bondholders authorized the representatives - York Capital Management, Psagot Investment House Ltd., and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) - to organize a toolkit for taking legal action against the company and the position of its current management.
The trustees today announced, "All resolutions which were on the agenda of the participating bondholders meeting, which met on February 14, were passed with the necessary majority."
With this statement, the bondholders of IDB Development, though which IDB Holding Corp. Ltd. (TASE:IDBH) holds its operational companies, have announced that they reject the company and its management's position that legal action does not suit the interests of the company or its bondholders.
A capital market source said, "This is a vote of confidence in the IDB Development bondholders' representatives, as expressed at the bondholders meeting. It is important for the company to have this toolkit. The representatives have expressed considerable concern about the company's condition, and demanded that the company raise capital, rather than the companies at the top of the pyramid. We hope that IDB will understand the need to deal with this issue now."
The representatives now intend to draw up a debt settlement for IDB Development, either a consensual proposal, or a proposal with a third party, or a proposal for independent action on an imposed settlement. The representatives have also brought forward their petition to the court against the company, on the grounds that it is not fully solvent.
IDB Development's main creditors are not individuals. The company owes Bank Hapoalim (TASE: POLI) NIS 800 million, which is not secured, so far as is known. IDB Development is shortly due to make a NIS 25 million interest payment to the bank. It seems that, for now, the representatives are not a hurry to fight the bank, as they did not seek to stop this payment before petitioning the court.
Published by Globes [online], Israel business news - www.globes-online.com - on March 3, 2013
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