TEL AVIV (Oct. 19)
The ailing Koor Industries got a month’s reprieve from bankruptcy proceedings this week, but the future of the giant Histadrut-owned conglomerate remains in doubt.
A Tel Aviv district court agreed Wednesday to a 30-day postponement of hearings on a petition by Bankers Trust Co, of New York for liquidation of Koor, to satisfy a $20 million unpaid debt.
Koor’s attorneys told the court the company is preparing a comprehensive recovery plan that would be fair to its creditors. It is said to involve interim financing by Israeli banks, which are Koor’s largest creditors.
But the plan requires the Treasury to put $50 million into Koor as a reassurance to the banks.
Bankers Trust, which is Koor’s largest overseas creditor, is still pressing for the appointment of a temporary receiver. The Americans apparently have lost faith in Koor’s ability to rescue itself.
Israeli banks are said to be wary of lending more money to Koor, The new loans would be unsecured if Bankers Trust’s petition for liquidation is eventually granted.
There were reports this week that three major Austrian banks to which Koor owes money were joining Israeli banks in an attempt to avert bankruptcy.
The government, meanwhile, faces a dilemma. While the Finance Ministry is loath to agree to any bailout plan, Koor’s collapse would be an economic and political disaster for Israel.
The trade union-owned accounts for about 10 percent of Israel’s gross national product and a like proportion of its exports.
The conglomerate’s debt worldwide is said to total $1.46 billion.