IDB Holding Corp. (IDBH)’s bonds fell, pushing the yields up the most in two weeks, as bondholders said they rejected a debt settlement proposal from the company.
The yield on IDB’s 5.1 percent bonds due December 2020 soared 140 basis points, or 1.4 percentage point, to 57.31 percent, the biggest gain since Dec. 24, at the close in Tel Aviv. The shares dropped 2.7 percent to 11.29 shekels.
“IDB Holding’s proposal for a debt settlement is unacceptable and very far from fair,” Eran Yoels, a spokesman for IDB Holding bond trustees, said today by phone. “We call on the company to come to the negotiating table with a very different pattern of thought.”
Yoels declined to reveal the settlement proposed but said IDB owes bondholders 1.7 billion shekels. Calcalist reported today that IDB Holding is asking institutional investors to approve delays of between 5 years and 15 years in bond principal payments. The company owes about 2 billion shekels to banks and bondholders, according to company data.
“We are conducting a continuous, fair and open dialogue with the bondholders representation with the aim to work together for the joint interest of bondholders and the company,” IDB Holding said today in an e-mailed statement. “The company has offered a detailed framework for the strengthening of the capital structure.”
IDB shares plunged 74 percent in 2012 as controlling shareholder Nochi Dankner sold assets and raised funds to try to meet debt commitments. Standard & Poor’s Maalot in December cut the holding company’s debt rating to default.
In August, IDB sold a unit of Tel Aviv-based Clal Insurance Enterprises Holdings Ltd. (CLIS) to Warren Buffett’s Berkshire Hathaway for $221 million. Argentinian businessman Eduardo Elsztain agreed in September to pay $25 million for 10 percent of IDB’s parent company Ganden Holdings Ltd., with the option of investing another $75 million.
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