December 9, 2013 / 2:58 PM / 4 years ago

Creditors in Israel's IDB approve Elsztain rescue plan

TEL AVIV (Reuters) - Creditors in debt-ridden Israeli holding company IDB Holding Corp IDBH.TA approved a rescue plan submitted by Argentine businessman Eduardo Elsztain and his Israeli partner, rejecting a rival proposal from controlling shareholder Nochi Dankner.

Nochi Dankner, the chairman of debt-ridden Israeli conglomerate IDB Holding, arrives at Tel Aviv District Court June 6, 2013. REUTERS/Baz Ratner

Elsztain and his partner, Israeli entrepreneur Motti Ben-Moshe, received over 75 percent of the votes of bondholders and bank creditors, the minimum needed for it to be approved, the company said on Monday.

As a result of the vote, barring court intervention, Dankner will lose control of IDB.

Many of the companies IDB owns have been hit by slowing economic growth and increased competition. IDB Holding owes bondholders 2 billion shekels ($571 million) and its subsidiary IDB Development IDBHD.UL owes a further 5.8 billion shekels.

IDB controls Cellcom (CEL.TA), Israel’s biggest mobile phone operator, and leading supermarket chain Super-Sol (SAE.TA).

Dankner, who bought IDB in 2003, struggled to retain control as the company’s debts mounted. He originally brought in Elsztain to help fund a bailout of the group but Elsztain broke the alliance and made his own offer. Dankner then partnered with Ukrainian businessman Alexander Granovsky, who offered to take over IDB through his mobile technology firm Emblaze EBLZ.L.

Both offers from Dankner’s group and Elsztain involved a mix of cash injections and swapping debt for equity.

Dankner said there is a still a legal process ahead as he has the right to take action in court.

($1 = 3.50 shekels)

Reporting by Tova Cohen; Editing by Steven Scheer

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