Elsztain agrees to invest $75 million in Dankner firms

Billionaire Nochi Dankner and Argentine Jewish businessman Eduardo Elsztain returned to Israel from Argentina Friday after striking a deal Thursday to help alleviate the former’s massive debts.

According to the agreement, Elsztain will invest $75 million in the companies of which Dankner is the controlling shareholder — $57 million in IDB and $18 million in Ganden Holdings.

As a result, Ganden Holdings will not ask Bank Leumi to forgive part of its debts, Channel 2 quoted sources close to IDB as saying.

Last week, Bank Leumi on Friday aborted a deal to forgive part of Dankner’s debts after the plan stirred a public outcry.

Dankner’s Ganden Holdings owes the bank some NIS 500 million in total, and the deal to strike nearly a third of it — NIS 150 million (about $40.5 million) — from the bank’s ledgers elicited an outpouring of anger from politicians, pundits, and the public all week.

In its first response Wednesday to the outcry, Leumi suspended the deal for review by the Bank of Israel. On Friday, though — amid reports that outraged Leumi account holders were threatening to close their accounts in protest that a billionaire was having his debts forgiven while the average account holder would never receive such treatment — Leumi CEO Rakefet Russak-Aminoach abandoned the deal altogether, and said the bank would explore all possibilities to recover Dankner’s debt in full.

Russak-Aminoach said the arrangement had become unworkable because of developments relating to another potential investor in Ganden Holdings.

Subsequently, Dankner flew to Argentina to convince Elsztain to uphold his end of a previously forged agreement with him and invest in the ailing companies.

According to Forbes Israel, Elsztain has already invested $25 million in Ganden Holdings. His newest investment will put him in control of 30.77 percent of the company’s share capital and make him vice chairman of the board.