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Delek Real Estate Ltd. (TASE: DLKR), controlled by Yitzhak Tshuva, last night agreed tghe outlines of a debt settlement with some of its bondholders, after hours of negotiations. The debt of the company's Series 4 and 5 bonds totals NIS 1.5 billion. The Series 25 bondholders still oppose the deal, and will meet today. The settlement is due to be published today.
The bondholders' offer is valid through January 31, and Delek Real Estate and the bondholders have to reach agreement by then. The company notified the TASE today that it was studying the offer.
The proposed settlement includes a NIS 500 million capital injection by Tshuva, NIS 400 million in guarantees, including a lien on 8% of shares Delek Group Ltd. (TASE: DLEKG), which he also controls. Delek Real Estate's current NIS 2.1 billion bond debt will be written off, and the company will issue two new bonds totaling NIS 1.3 billion, which will be repaid over 16 years. The bondholders will also receive 45% of the company.
During the meeting, a bondholder told Tshuva, "Debts should be repaid. Return the dividends you received from Delek Real Estate, and sell some the companies you own. Pay your debts; you'll be poorer, but you'll be noble. You'll build Israel's confidence in corporate bonds."
Delek Real Estate's share price rose 10.9% by early afternoon to NIS 0.275, giving a market cap of NIS 109 million.
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