IDB bondholders reject Elsztain’s latest offer

The bondholders of IDB Development’s series 9 bonds decided unanimously yesterday to approve the sale of the Tivoli Village office and commercial project in Las Vegas and the land adjacent to it for $216 million. The bondholders also voted by a 99.86% majority to reject the offer of former controlling shareholder Eduardo Elsztain to buy IDB Development outright from the trustee for the company, Adv. Ophir Naor.

IDB development, which is in liquidation, holds 25.82% of IDBG, which owns the Tivoli Village project and the adjacent land. The remaining shares in IDBG are held by Property & Building, which is controlled by Discount Investment. Since IDB Development is in the hands of a trustee, the deal to sell the assets is subject to court approval. The fact that the series 9 bondholders, who are the company’s main creditors, voted in favor of it substantially raises the chances that approval will be forthcoming. Assuming that it is completed, it will yield net cash flow of $65 million to Property & Building and $22 million to IDB Development.

IDB Development has one other main asset – 25% of airline Israir. Earlier this month, Elsztain offered to buy IDB Development with these two assets for NIS 20 million cash and a further NIS 50 million when the option to sell the shares in Israir to BGI Investments, controlled by Rami Levy, expires.

Elsztain also offered IDB Development’s creditors a further payment in the form of 50% of the upside that would arise in the future from the holdings in Israir and IDBG, but, as mentioned, the series 9 bondholders, to whom IDB Development owes NIS 900 mn rejected the offer almost unanimously.

Published by Globes, Israel business news – en.globes.co.il – on December 20, 2021.

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