Leumi and FIBI squabbling over Tevel shares

A squabble is brewing between Bank Leumi and First International Bank of Israel over shares in Tevel.

Leumi wants a lien on some of the shares United Pan-European Communications (Nasdaq:UPCOY, ASE:UPC) holds in Israeli cable TV company Tevel, as security for loans to Tevel over the last year, TheMarker has learned.

The demand has been delivered to UPC, which is meanwhile negotiating an even more extensive move regarding the shares with First International Bank of Israel.

FIBI wants a lien on UPC's entire 46.5% stake in Tevel, which would make the bank the biggest shareholder. In exchange, FIBI is offering to write off UPC's entire NIS 250 million (€55 million) debt to it. Under the original arrangement, UPC is due to repay the loan in about two months.

All the parties involved have been exchanging letters, TheMarker has learned.

FIBI already holds a lien over half UPC's stake in Tevel. Leumi argues that FIBI does not have rights to the rest of the shares, some of which should serve to secure Leumi's loans to Tevel.

The brewing squabble between FIBI and Leumi one of the obstacles to a comprehensive refinancing arrangement for Tevel, which is a prerequisite for the company's merger with Israel's other two cable TV companies Golden Channels and Matav Cable Systems (Nasdaq:MATV).

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