Bezeq controlling shareholder given 18 December deadline over $400m debt

Bezeq controlling shareholder given 18 December deadline over $400m debt

The company that owns Bezeq, Yes and Pelephone has until a week on Monday to pay much of a $400 million debt or risk action for liquidation.

Three banks are threatening a court order if the group that owns the telcos does not pay a “substantial portion” of the debt by 18 December.

The troubled holding company is Israel’s Eurocom Group – which is not related in any way to UK-based Eurocom Ltd. The Israeli company owns a majority stake in Bezeq, Bezeq International, Yes, Pelephone, internet provider Walla, as well as in companies such as Spacecom, Satcom Systems, Eurocom Digital Communications and Eurocom Cellular Communications, according to the group’s website.

The Bloomberg news agency is reporting that the banks have not accepted an offer from the Eurocom Group and need to agree how the group’s assets are divided. An earlier plan to sell Spacecom came unravelled after a SpaceX satellite launcher blew up on the pad. 

Eurocom Group has warned shareholders that it “has received a written communication from banks … in which Eurocom is required to repay a significant debt (including guaranteed debts), within a specified time frame”.

It told shareholders that it “is holding intensive discussions with the banking system to arrange and spread its outstanding loans and that it intends to continue intensive discussions in order to arrive at agreements within a short time, there being in its opinion the real possibility of achieving an arrangement”.

However Bloomberg reported this morning that relations between the banks and the group – which owns a controlling 26% stake in Bezeq – “have soured”, and quotes sources saying Eurocom “is acting in bad faith by avoiding requests for documents”, and adds that Eurocom is “arguing it is adhering to all that is asked of them”.

The issue is complicated by a criminal investigation that is going on into Shaul Elovitch, who owns Eurocom Group and is a former chairman of Bezeq. His lawyers have denied any guilt, but the investigation has reached other executives.

In August police arrested David Granot, Bezeq’s acting chairman. Last month an activist investor in Bezeq asked the country’s attorney general to investigate Israeli prime minister Benjamin Netanyahu, who is a personal friend of Elovitch.

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