(Bloomberg) -- An Israeli court ordered the forced sale of assets held by Eurocom Group Ltd. after the company’s creditors failed to find a buyer for the indebted conglomerate, which indirectly holds a majority stake in the country’s largest telecommunications firm.
The judge presiding over Eurocom’s case ordered creditors to appoint a liquidator for Eurocom Communications Ltd., the unit that holds Bezeq Israeli Telecommunication Corp. and smaller stakes in other firms, and Eurocom’s real estate holdings, according to the emailed court order Sunday.
Eurocom Communications owes 1.3 billion shekels ($368 million) to several Israeli banks and other lenders, while the real estate division has about 260 million shekels worth of bank loans outstanding, according to the court documents.
A forced asset sale likely diminishes the proceeds the banks can recoup from the loans they extended to Eurocom. The lenders were in advanced talks to sell Eurocom in one piece to a group led by Israeli-American businessman Naty Saidoff, but negotiations fell through after Bezeq cut its dividend and promised to overhaul its board of directors to limit Eurocom’s influence.
Bezeq shares were up 0.7 percent Sunday at 4.399 shekels before Tel Aviv trading was halted in stocks owned by Eurocom.
The company ran into a cash crunch after a series of government reforms started eroding Bezeq’s profits and dividend payments, which were earmarked to reduce the mountain of debt used to finance Eurocom’s takeover of the telecom giant in 2010.
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