The tension between IDB Development Corporation Ltd. (TASE:IDBD) controlling shareholders Moti Ben-Moshe and Eduardo Elsztain, against the background of the company's difficult situation, is reaching a peak. After a six-month partnership that cost the two men NIS 1.4 billion from their private wealth, it appears that they want out of the partnership, one way or another.
Sources inform "Globes" that Ben-Moshe was heard saying in confidential talks in recent days that he had made it clear to Elsztain several times that "the current state of affairs cannot continue," and that "his responsibility to the minority shareholders, the creditors, the employees, and the economy in general requires that he put an end to the deadlock." Ben-Moshe also notified his partner that he "intends to take all measures necessary to lead IDB forward."
On the other hand, sources close to Elsztain say, "He believes that the companies need capital more than talk, and out of complete consideration for the anxieties of shareholders from the public, Eduardo will take the lead in measures that will significantly enhance the company's capital, and expects willingness from his partner. At the board of directors' request, Elsztain came to Israel within 24 hours, and found that Moti was in Europe. Since then, Elsztain has been conducting talks on his own initiative, among other things with the shareholders from the public and the bondholders, to find a solution that will enable him to lead the company on the right path."
Ben-Moshe and Elsztain acquired control of IDB Development as part of the debt arrangement for its parent company, IDB Holding Corp. Ltd. (TASE:IDBH). As of now, following the deterioration in IDF's situation, the two men have lost NIS 1 billion of their investment on paper.
Published by Globes [online], Israel business news - www.globes-online.com - on December 4, 2014
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