Partner Bondholders Oppose Unusual Half-Billion Shekel Dividend Payout Plan
Two weeks after Partner Communications sought court approval for an extraordinary dividend distribution of approximately 500 million shekels, bondholders led by investment firm Mor have opposed the move. At a meeting held on Wednesday, holders of Partner's Series Z and H bonds voted against the company's request not to oppose the dividend payout, with 55% rejecting the proposal. The opposition was spearheaded by Mor's pension and provident fund operations, alongside mutual fund companies KSM and Harel. The trustee is expected to inform the court of the bondholders' stance, potentially influencing the court's decision.
Partner, led by CEO and former minister Avi Gabbay and Chairman Shlomo Rodev, requested the dividend despite having profits of only about 74 million shekels, planning to finance the payout through a 750 million shekel debt issuance. This would raise the company's net financial debt from 128 million to an estimated 783 million shekels. The court must be convinced that the dividend will not harm the company's financial stability. Market analysts believe the move aims to reduce equity and return funds to investors, primarily controlling shareholder Ampisah Group, which holds around 21% of the company.
Partner resumed dividend payments last year for the first time since 2012, after halting them due to increased competition and price wars in the cellular market. Since then, dividends totaling 168 million shekels have been paid to shareholders, including Ampisah.
Separately, Mor also led opposition against renewable energy company Nofar's interpretation of its financial obligations, prompting Nofar to initiate a voluntary early redemption of about 400 million shekels of bonds. Nofar's dispute with the Israel Securities Authority centers on differing views of the company's net financial debt. While some bond series holders approved Nofar's proposal, others rejected it, leading to the early redemption decision. Mor has a history of conflicts with Nofar and its controlling shareholder, including opposing control transfers and demanding immediate bond repayments.
Nofar stated it fully meets its financial commitments and acted proactively to clarify uncertainties, emphasizing its financial strength and ongoing business development. The company chose not to offer financial incentives to bondholders for approval, adhering to a principle that interpretive disputes should not be resolved through economic changes to bond terms.
