Tao Tsuot Ltd. (TASE: TAO-M) bondholders today postponed today's meeting for two weeks, after the investment house's controlling shareholder, Ilan Ben Dov agreed in writing to the debt settlement terms
In a notice to the TASE, Tao said, "Ben Dov wishes to state that he agreed to the commercial terms in the agreement, subject to reaching a settlement with the secured creditors."
In the revised debt settlement, announced in mid-December, Tao proposes to exchange its current bonds, which total NIS 410 million, with two new bond series and defer payment. The bondholders will take a haircut of over 40%.
Last week, the bondholders' representative made harsh charges in a letter to Bank Leumi (TASE: LUMI), Tao's largest creditor. In 19 detailed paragraphs, the bondholders said that the bank and the controlling shareholder were directly responsible for the damage caused to the company over many years, especially in 2008-09, by forcing the company and its management to carry out measures against its will and against its business discretion, but solely on the basis of the considerations and interest of the bank and the controlling shareholder. These actions cost the company hundreds of millions of shekels.
The bondholders added, "Had the bank and controlling shareholder of the company not forced it to sell in a hurry and against the professional opinion of the company, these actions would have been avoided, and the debt to the bondholders could have been paid in full."
The day before this letter, Ben Dov threatened the bondholders that if they sought legal remedies, he would not resume negotiations on a debt settlement.
The TASE has suspended trading in Tao's shares.
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2012
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