Partner Telecom Repays Bond Series Amid Dividend Dispute

Partner Communications, led by CEO Avi Gabbay, has decided to prematurely redeem another series of its bonds, Series Z, worth NIS 340 million. This move follows opposition from bondholders of Series Z, and previously Series H, to the company's plan to distribute a NIS 500 million dividend.

Partner does not have sufficient cash reserves to fund the proposed dividend from its profits, having already distributed NIS 465 million earlier this year. A key condition for approving such a dividend distribution is a solvency test, ensuring it won't impair the company's ability to repay bondholders. Partner currently holds NIS 158 million and requires both court approval and consent from two-thirds of the holders of each bond series to proceed with the dividend.

The company initially opted for early redemption of Series H bonds, totaling NIS 140 million. However, it encountered resistance from Series Z bondholders, spearheaded by the investment house More. Series Z is scheduled for redemption in July 2027. Some holders in Series Z sought compensation from Partner for agreeing to the dividend distribution, which was not granted.

Consequently, Partner chose to redeem the entire Series Z, amounting to NIS 344 million including NIS 4 million in interest. The company had aimed to raise NIS 750 million to facilitate the dividend payout, and this amount may now need to be increased.