On Thursday, bondholders of Alon Group, company representatives, and the controlling shareholders met at the Lod District Court for a hearing to decide whether the bondholders had acted lawfully in presenting the company's debt for immediate repayment. Before the hearing began, however, the parties began intense negotiations in the corridor of the law courts in an attempt to bridge the gaps between them and agree on a debt settlement outline.
After almost two hours, the matters in dispute were resolved. The Alon Group will have until October 1 to raise capital from its existing shareholders and from the public in an offering on the Tel Aviv Stock exchange. In exchange, the company will allocate 2-5% of its shares to the bondholders, while the existing owners (Shraga Biran, David Wiessman and the kibbutzim) will agree to transfer to them full ownership of the shares in the company if it does not succeed in raising the required capital by the agreed date.
Under the settlement, the Alon Group will also pay the latest debt payment which had been delayed up to now, while the bondholders will agree to reduce the interest rate and reschedule principal repayments when the settlement comes into force.
Alon has a debt of NIS 1.8 billion to its bondholders (mainly financial institutions) and a debt of NIS 155 million to Bank Hapoalim (TASE: POLI) relating to guarantees the bank gave in the past to subsidiary Alon Retailing, which the settlement reached on Thursday does not cover. Alon's board of directors and controlling shareholders approved the settlement immediately, as did the bondholder representatives. The bondholders will have to meet within fifteen days to vote on the settlement.
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017