Internet Gold to launch creditors’ arrangement; proceeds not enough

By Caroline Salls

Pittsburgh, June 24 – Internet Gold – Golden Lines Ltd. said on Monday that the proceeds received by the company under a proposed purchase by Searchlight Capital Partners of Internet Gold’s shares in B Communications Ltd. would not be sufficient to enable Internet Gold to pay its debts.

According to a filing with the Securities and Exchange Commission, Internet Gold will initiate a creditors’ arrangement, which will be submitted to the applicable Israeli court pursuant to Section 350 of the Israeli Companies Law.

The company said it expects that, under the arrangement, its existing shares will be nullified.

Internet Gold said in a separate release dated Sunday its board of directors approved the transaction with Searchlight Capital Partners and its Israeli partner on June 20, considering the results of the company’s debenture holders’ meetings.

The company said BComm announced on Saturday that it reached an agreement with the trustee of the debentures and Searchlight to convene an additional meeting of series C debenture holders on June 24.

The new majority requirement at the Monday meeting was 51% of the votes of BComm’s series C debenture holders.

All definitive transaction documents were expected be executed within a few hours of the published results of the meeting.

If any of these conditions are not fulfilled, Internet Gold said Searchlight’s offer will immediately expire.

The share purchase agreement indicated that Internet Gold wishes to subscribe for seller-subscribed debentures for a total purchase price of NIS 310 million and for seller-subscribed shares for a total purchase price of NIS 35 million.

Meanwhile, the buyers wish to subscribe for shares with a total purchase price of NIS 260 million.

Internet Gold is a telephone and internet provider based in Ramat Gan, Israel.

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