Oct. 08--On October 30, Eyal Gabbay, the court-appointed expert for IDB Holding Corp. Ltd. (TASE:IDBH), will submit his opinion on the various proposals that will be filed with the court for the acquisition of control of the company. Only two proposals have been filed to date: by IDB's bondholders and their partner, Eduardo Elsztain; and by IDB's current controlling shareholder, Nochi Dankner and his partner, Alexander Granovsky.
In a letter to IDB and the bondholders representative, Gabbay said that, following queries sent to him by potential investors, apparently investors who are not active in Israel, there was a need to act with maximum transparency. He therefore wants criteria published to help him assess the debt settlement proposals for the company. "These criteria are not binding... However, they are intended to provide a general picture for the parties considering submitting a proposal for a settlement," he wrote.
For example, Gabbay wants, in addition to the size and valuation of the settlement, to receive documents about the investor's background, the nature of the expected holding, the control chain and leverage on the day after the acquisition, experience with debt settlements, and the investor's wish and ability to obtain the necessary permits from the Israeli regulator (in view of IDB's holdings in mobile carrier Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS)).
Gabbay also wants the investors to list the sources of financing for the settlement, the availability of capital, and the wherewithal to support IDB Holding's subsidiary IDB Development Corporation, as well as a business plan for managing the company and its subsidiaries, and corporate governance on the after the settlement. To review the proposals that will be submitted, Gabbay has hired KYC Israel -- MNS Consulting Ltd.
Gabbay's letter follows the recent widespread criticism about the conduct of the unofficial tender for control of IDB, especially the conduct of the bond trustees, which have linked the bondholders' fate to the deal with Elsztain. This caused Tel Aviv District Court Judge Varda Alshech to stop the votes by IDB's bondholders on the settlement with Elsztain in response to objections filed by the company and private bondholders.
Gabbay was also not sparing in his criticism in his response to the court on this matter, saying that the tender that has been conducted to date has been deficient and insufficiently clear to potential investors. He specifically pointed to the absence of an information room.