Businessman Nochi Dankner's IDB Group finalized a deal with Argentine Jewish businessman Eduardo Elsztain on Friday aimed at saving the floundering company. The deal, signed in Argentina, includes an immediate infusion of $25 million in exchange for 10 percent of the stock in Ganden Holdings Ltd, through which Dankner controls IDB. Considered to be the richest Jew in South America, Elsztain heads IRSA, Argentina's largest real-estate company. Dankner owns Ganden, which owns 21.18 million IDB holding shares, for a 45.87% stake in the company. Beyond Elsztain's initial bailout of the company, the agreement also includes an option to invest an additional $75 million in the company in exchange for 20% more of the stock, reflecting a total value of Ganden Holdings at $324.5 million. The IDB Group has had a rough year overall, taking a nose-dive in late August 2011. IDB bonds were also struggling and the company was teetering on the edge of defaulting on its debts, which would have affected the Israeli public, as citizens' pensions were leveraged as loans for several tycoons, including Dankner. The IDB Group expressed its hope that the cash injection would largely resolve the ongoing conflict with institutional investors, such as the pension funds, provident funds and insurance companies, who have demanded repayment for previous loans granted to Dankner's companies. IDB Group needs 350 million shekels ($90 million) to repay all of its obligations for the second half of 2013.
Wealthy Argentine businessman bails out IDB Group
Immediate infusion of $25 million in exchange for 10% of Nochi Dankner's Ganden Holdings Ltd. stocks will save IDB Holdings from defaulting on its loans • Deal signed between Dankner and Eduardo Elsztain on Friday in Argentina.
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