Israel Salt Industries (TASE:

SALT

) is trying to raise capital through an NIS 50 million offering of convertible bonds, TheMarker has learned.

Salt Industries, which owns an 11.9% stake in

Bank Hapoalim (TASE:

POLI

), wants the capital in order to repay bridging loans taken from

Bank Leumi (TASE:

LUMI

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).

These bridge loans, taken last year to pay interest on loans from Leumi used to buy the Hapoalim stake, come due in October.

The bridge loans total some NIS 80 million, which Salt Industries does not have the resources to repay in full.

Salt Industries has reportedly contacted a leading investment house to check the possibility of a quick offering of convertibles.

In parallel, it is looking at a private placement of 5-year convertibles to a single investor. The investor would apparently receive a call option to buy additional Salt Industries shares, while Salt Industries would have a put option to force the investor to sell his shares and/or bonds in the company, at a higher price.

Salt Industries borrowed the additional sums from Bank Leumi immediately after Bank Hapoalim paid out its last dividends, in July 2001.

Altogether Salt Industries owes Bank Leumi about NIS 1.5 billion.

A previous attempt Salt Industries made to raise capital, by allocating 33.3% of its shares to businessman Yossi Maiman for $90 million, fell through.

Insofar as is known, Maiman changed his mind about investing in Salt Industries because of the extensive examination the Bank of Israel would have made into his affairs, as required by his joining the group controlling Bank Hapoalim.