Smallest banks raising highest obstacles to settlement, says source near Zeevi

No solution reached today after tycoon defaulted on $45m interest payment last week
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No solutions were reached in a day of intensive negotiations after tycoon Gad Zeevi defaulted on a $45 million interest payment to a consortium of seven Israeli banks, due last Thursday.

Zeevi representatives are in constant talks with the banks, the source said, adding that the highest obstacles were being raised by the smallest banks. He said there was hope of a solution being reached soon, though he declined to elaborate.

Meanwhile the banks are acting toward seizing certain of Zeevi's assets, specifically shares in the Bezeq phone company provided as collateral for the loans.

Zeevi originally borrowed about $710 million from the banks to buy a 20% stake in the state-run Bezeq phone company from British firm Cable & Wireless.

The lenders are Bank Hapoalim, Bank Leumi, First International Bank of Israel (FIBI), Mizrahi Bank, Israel Discount Bank, Mercantile Bank ¿ a subsidiary of Discount, and Union Bank of Israel.

The group has yet to take steps to exercise a $150 million letter of guarantee provided by FIBI's Swiss subsidiary, which put the consortium together.