After Eduardo Elsztain was forced to relinquish hopes of retaining control of Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), last week, the board of directors of IDB Development received an offer from Barak Capital and Leader Underwriters to buy the controlling stake in the insurance company.
The two underwriters submitted a binding offer, in the name of private and institutional investors, to buy IDB Development’s entire 20.3% holding in Clal Insurance for NIS 630 million.
Debt settlement looks inevitable for IDB
The offer is to buy 7.5 million of the 11.3 million shares in Clal Insurance held by IDB Development in return for IDB Development series 9 bonds, in the proportion of 600 bond units for each Clal Insurance share.
The underwriters sought an option to buy a further 3.7 million shares in Clal Insurance at NIS 53.3 per share, in cash or in series 9 bonds.
The offer is valid until tomorrow (Monday), when the series 9 bondholders are due to vote on whether to demand immediate repayment of a debt of NIS 1.2 billion because of IDB Development’s difficult financial position.
Elsztain controls the IDB Development-Discount Investment group, which he took over in 2014 in the context of a debt settlement of the former parent company of the group, IDB Holding Corporation, which collapsed along with its former controlling shareholder Nochi Dankner. Credit rating agency SP Maalot recently wrote that “The risk of insolvency or a debt arrangement in the company in the next six months has increased.”
Published by Globes, Israel business news – en.globes.co.il – on August 11, 2019
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Article source: https://www.globes.co.il/en/article-1001296721