Creditors: Guarantees held by Discount for Tevel debt are inferior - TheStreet

Top executives at three of the cable company Tevel's biggest banking creditors claim that loan guarantees held by a fourth bank, Israel Bank Discount, are inferior.

Discount denies the allegation. But if true, it would mean that the other three banks ¿ Hapoalim, Leumi and First International ¿ would be first in line if Tevel enters receivership and its assets are disbursed to repay its NIS 2.3 billion debt.

Tevel owes Discount NIS 390 million.

A Discount spokesperson said there had been a technical glitch in registering Tevel's guarantees and liens.

That glitch has been ironed out, the spokesperson says, making the quality of Tevel¿s guarantees to the bank identical to the quality of guarantees held by the other three banks.

A top Tevel executive said the company is aware of the differing interpretations by the banks. The issue is under investigation, he said.

Last week, TASE-traded Discount Investment Corporation, which holds 50% of Tevel's shares, agreed to stream between $5 million to $10 million to the troubled cable company.

Discount Investment's decision followed a court threat to unfreeze legal steps against Tevel unless the company's shareholders provided succor to the cable company.

Tevel's other shareholder, the pan-European cable company UPC (Nasdaq:UPCOY) ¿ 50%, and Discount Investment Corporation will each be forgiving Tevel NIS 140 million worth of debt.

Tevel's debts to the banks are:

To Leumi ¿ NIS 966 million.
To Hapoalim ¿ NIS 483 million.
To First International ¿ NIS 460 million.
To Discount ¿ NIS 391 million.