Tevel petitions court for stay of proceedings
Cable TV firm Tevel today petitioned Tel Aviv District Court for stay of liquidation proceedings for four months, and to appoint a trustee and special manager for the firm.
Tevel is in fact seeking protection from its creditors. Its debt comes to a huge NIS 3 billion, and it has postponed payments to suppliers for more than four months.
The petition, said Tevel, is in order to draft a recovery plan. Major shareholder Discount Investments (48.5%) is in talks with the banks in an effort to obtain a new credit line for Tevel through December.
In addition, there is a dispute between the two main shareholders Discount Investments and Dutch cable firm UPC, which wants to sell the majority of its 46.5% interest. UPC doesn't want to inject money into Tevel and is demanding that Discount Investments inject money without diluting UPC.
Market sources estimate that Tevel's situation will improve if it enters receivership because Discount Investments will be able to inject capital while diluting UPC. At the same time it is believed that such a move will take a long time and be expensive, because it is likely UPC will embroil Discount Investments in a legal battle delaying the cable companies - Tevel, Matav (Nasdaq:MATV) and Golden Channels -merger, which awaits regulatory approval.
Tevel CEO Joseph Douer said that the aim of the petition for a stay is to ensure that the company will continue providing services and to enable a comprehensive recovery plan. "The move will enable continued service to customers in an orderly manner without broadcasts being hurt," Doer said.
