The Israeli multinational communication giant, Gilat Satellite Networks (GFILTF), currently facing liquidation threat, has set up plans to give creditors an 80 percent stake in the company in exchange for the elimination of 77 percent of its nearly $362 million indebtedness.
GILTF which filed a petition for protection from creditors in Israel two months ago, had filed a secondary case in United States Bankruptcy court to prohibit creditors from seizing its assets in US.
With the consent of its lenders and a majority of its 4.25 percent convertible subordinated shareholders, Gilat filed for a reorganization, an application that gives it a 30-day stay of proceedings against the lenders and stockholders to enable the company propose an arrangement for a re-orgainzation plan.
Under the threat of bankruptcy many Nigerian telecommunication companies are already threatened on their equipment supply and services lines maintained by Gilat, a similar development last year had caused local operators and their clients over seven million dollars in broken contracts.
Most of Gilat's bondholders and its lead banker, Bank Hapoalim, have agreed to the reorganization plan, which would enable the satellite networking equipment supplier to avoid bankruptcy. Gilat which provides products and services for satellite-based communication networks, filed for creditor protection in Israel.
Gilat, based in Petah Tikva, Israel, cited total assets of $775 million and total debts of about $637.2 million as of June 30 in its section 304 filing. In addition to the threat of a default on its interest payment, the company also cited the downturn in the telecommunications and technology capital markets among the reasons for filing for reorganisation overseas. — (menareport.com)
© 2002 Mena Report (www.menareport.com )