Israeli tycoon Shaul Elovitch is facing pressure by banks to sell his controlling stake in Israel’s largest telecommunication firm to cough up the funds he owes them, Calcalist reported on Thursday.
Three Israeli banks filed a request in a Tel Aviv court on Wednesday to break up Eurocom Communications Ltd., as it is insolvent, they said, according to a filing by Bezeq The Israeli Telecommunication Corp Ltd. to the Tel Aviv Stock Exchange late Wednesday.
Elovitch holds a controlling stake in Bezeq via Eurocom, which owes the three banks NIS 961 million ($278 million), Bloomberg reported on Wednesday.
Bezeq said in the filing that it received notification from Eurocom that the banking corporations had filed a request with the court to appoint overseers to handle the sale of assets and service debt.
The injunction demands that the overseers get “full access” to Eurocom information and they be allowed to take emergency legal steps to ensure the rights of creditors, if necessary. The injunction also asks for the breakup of Eurocom, Bezeq said.
Eurocom has said it will agree to overseers chosen by the creditors, the filing said.
Calcalist reported Thursday that the banks have no intention at the moment of breaking up Eurocom but want to use the court injunction to apply pressure toward the sale of its assets.
Bezeq shares were trading 4.1 percent higher on the Tel Aviv Stock Exchange at 11:53 a.m. Potential buyers have already approached Eurocom following the filing, Calcalist said.
Eurocom owes Israel Discount Bank Ltd. NIS 480 million; Bank Hapoalim Ltd. NIS 350 million and some NIS 141 million to First International Bank of Israel Ltd., Calcalist said.
Bezeq shares have plunged some 18% in the past 12 months, as the Israel Securities Authority launched an investigation into the dealings between Elovitch and Bezeq executives and their relations with the Communications Ministry. Elovitch’s lawyers have said he is innocent. Bezeq investors had been selling shares on concerns over the fate of the company.