A Tel Aviv court on Sunday put out liquidation and receivership orders for Israel’s Eurocom Group which via units holds a controlling stake in Israel’s largest telecommunication firm Bezeq. The orders pave the way for the assets of Eurocom to be put up for sale in separate bidding auctions.
The orders will come into force on May 3, according to the request of the company’s creditors, Israel Discount Bank Ltd., Bank Hapoalim Ltd. and First International Bank of Israel Ltd., Calcalist website reported. The three Israeli banks filed a request to the court at the end of 2017 to break up Eurocom, saying it was insolvent.
The orders come as the owner of Eurocom, Shaul Elovitch, and Bezeq executives have been embroiled in investigations regarding their dealings with the Communications Ministry and Prime Minister Benjamin Netanyahu in what came to be called Case 4000. Their lawyers have said they are innocent.
Elovitch has been under pressure by creditors to sell Eurocom, which reportedly owes Israeli banks some NIS 1 billion. Talks for a sale to buyers including Argentine billionaire Eduardo Elsztain and US-Israeli businessman Naty Saidoff, who sought gain control of either Eurocom or Bezeq, failed to materialize, paving the way for the court orders on Sunday.
Elovitch, who was also Bezeq’s chairman until the start of the investigations led by the Israel Securities Authority, owns a stake in Bezeq via a pyramidal company structure: his firm Eurocom Communications Ltd. controls Internet Gold-Golden Lines Ltd. which in turns controls B Communications Ltd. B Communications holds a 26% stake in Bezeq, and the rest of Bezeq, 74%, is held by the public via shares traded on the Tel Aviv Stock Exchange.
Elovitch also controls satellite communication provider Space-Communication Ltd. (or Spacecom Satellite Communications Ltd) and has holdings in real estate units.
“This is a natural next step after no willing buyer appeared for Eurocom,” Saar Golan, an equity trader at Meitav Dash Brokerage in Tel Aviv, said by phone. “It will perhaps be easier to find buyers for the specific assets within Eurocom, including Bezeq, SpaceCom, and real estate assets, then selling the parent company en bloc to an investor.”