The sale of Israeli telecom company Internet Gold - Golden Lines Ltd.'s 51.95% stake in B Communications Ltd. to private equity firm Searchlight Capital Partners LP is expected to close on Oct. 31.
At the closing date, the company will sell its entire holdings in B Communications for 225 million Israeli shekels and will invest 345 million shekels in B Communications. Internet Gold will receive 310 million shekels par value of series C debentures, as well as 8,383,234 ordinary shares of B Communications.
If the Searchlight Transaction is completed, Internet Gold said it will not be able to fully pay its debts, and it intends to initiate a creditors' arrangement, which would be submitted to the applicable Israeli court. Internet Gold anticipates that pursuant to such arrangement, the existing shares of the company will be nullified and the creditors of Internet Gold will receive, inter alia, 100% of the shares of the company.
Further, Internet Gold has been exploring potential strategic alternatives, which include the acquisition of a new business in consideration for the company's shares or a sale of the company as a shell company.
B Communications' shareholders approved the planned sale in August. Internet Gold initiated the sale process in October 2018.
As of Oct. 4, US$1 was equivalent to 3.48 Israeli shekels.
