IDB Holding Corp. (IDBH) bondholders will meet next week to authorize trustees to start an insolvency process if a debt settlement is not reached as the company’s chairman confirmed he was subject to a securities fraud probe.
IDB debt holders of Series Aleph through Heh bonds will vote on Dec. 2 to authorize the start of the process and other steps to protect the holders’ rights, according to a company filing today with the Tel-Aviv Stock Exchange. Bondholders will stop the process if a settlement is reached, according to the filing. The yield on IDB’s 5.1 percent bond due December 2020 jumped 13.82 percentage points, to 74.60 percent, the highest since Oct. 16 at the close in Tel Aviv.
“In recent months there was no improvement in the financial situation of the company and there is a possibility that the third-quarter results will also include a ‘‘going concern warning’’, according to the statement.
The Israel Securities Authority said yesterday it was probing IDB Chairman Nochi Danker for alleged securities fraud. He said yesterday that he is confident of the legality of his actions. IDB shares plunged 10.2 percent, the most since Feb. 26 to 13.65 shekels extending a 19 percent decline in the last three days.
IDB’s Dalet (DLT) series debt holders are scheduled to receive 65 million shekels ($16.8 million) in interest payments in December, according to the statement. As IDB struggles under about 2 billion shekels of debt, it has recently been seeking funding and selling assets, to avoid defaults.
The company said this month it is considering securing a ‘‘significant loan’’ from KKR & Co. LP (KKR:US), the alternative-asset manager run by Henry Kravis and George Roberts. IDB said on Sept. 23 that parent company Ganden Holdings Ltd. signed an agreement with Eduardo Elsztain for an investment of as much as $100 million.
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