Ukrainian-Jewish businessman Alexander Granovsky said
Thursday that if he and Nochi Dankner get the nod from a court to take control
of the IDB group, Granovsky will remove Dankner and his associates from the
management team. Dankner is currently the group’s controlling shareholder.
The Granovsky group and a rival consortium led by
Argentine-Jewish businessman Eduardo Elsztain are vying to take control of the
financially troubled IDB. Granovsky and Danker say they have brought food
importer Willi Food into their consortium, although it appears that this
commitment will be limited to a loan.
The group led by Elsztain and Israeli businessman Motti
Ben-Moshe tried to solidify its position by making a deposit in a trust account
that now holds a billion shekels to secure a proposed debt-rescheduling plan.
The IDB group includes Israeli fixtures such as the Super-Sol supermarket chain
and the Cellcom cellular service provider.
Granovsky and Jossef Schneorson, the chief executive of
Granovsky’s investment vehicle Emblaze, said Thursday that Dankner would be
removed from his management role at IDB if their bid succeeds.
“From the day we assume control, the management team of IDB,
beginning with the position of chairman, currently held by Dankner; the chief
executive, Haim Gavrieli; and senior IDB management [will be replaced by] a new
team that is not part of the investor group,” Granovsky and Schneorson said in
a statement. “They will be professional at the highest possible level that can
be found in the Israeli business sector.”
Granovsky and Schneorson said they had been in touch with
senior Israeli business figures in an effort to put together a management team.
For their part, Elsztain and Ben-Moshe said Granovsky’s bid
was marred by uncertainties. They said the Willi Food loan in Granovsky’s plan
was “apparently affected” by a conflict of interest.
On Wednesday Yossi Williger, who with his brother Zvi
controls Willi Foods, denied that he would be joining the Granovsky-Dankner
group.
But on Thursday the Granovsky group announced that Willi
Food had agreed to provide a NIS 65 million loan to a firm controlled by Granovsky
and Dankner as part of their bid for IDB. Yossi Williger is said to have the
right to convert the loan into shares of two key IDB companies - IDB
Development or IDB Holding.
Zvi Williger said no decision had been made on converting
the debt to equity. An antitrust expert said Thursday that it was up to the
antitrust commissioner to decide if a link-up between Willi Foods and IDB would
violate antitrust rules in light of IDB’s control of Super-Sol, the country’s
largest supermarket chain.
In related developments late Thursday, IDB Holding, the
publicly traded company at the top of the IDB pyramid, said it lost NIS 380
million in the third quarter, compared with a NIS 17 million loss a year
earlier. For the first nine months of the year the loss was NIS 358 million,
compared with NIS 970 million a year earlier. Third-quarter revenues fell 6%.
Of particular interest in the figures was the cost of
Dankner’s fight to retain control of IDB Holding, which owes creditors NIS 2
billion. In the third quarter, the effort at a debt settlement cost the company
about NIS 17 million, including legal fees and payments to experts. Subsidiary
IDB Development shelled out about another NIS 15 million in the quarter for
similar expenses.
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