The Haifa District Court today dismissed the request for receivership for Vita-Galilee Fruit Ltd. (Vita-Pri Galil) (TASE: VITA). The court gave the company 21 days to reach a settlement with the banks.
Vita's board proposes transferring the 42% controlling core of the company to farmers associations in exchange for a debt write-off. The board also proposes allocating 15% of the company to its two creditor banks, Bank Leumi (TASE: LUMI) and Israel Discount Bank (TASE: DSCT), in exchange for a partial debt write-off. The board submitted its proposal to the Haifa District Court today
Vita's board is working with farmers associations and proposing an arrangement, under which control of the company will be handed over to a designated trust. This trust will be managed by a designated management company that will be controlled by a business concern agreed upon by the farmers associations and the banks.
The proposal was submitted in the objection to receivership filed by Vita's board, and in its request to convene shareholders and creditors' meetings to submit to them a recovery plan for the company and its subsidiaries.
The board proposes that an investor group inject NIS 24 million into the company in exchange for a 51% controlling interest in the company. Major Galilee farmers associations will participate in this controlling interest.
Vita is controlled by Ian Nigel Davis, Aviv Algor, and Rich Products Corporation. The company has a working capital deficit of NIS 65.6 million and lost NIS 7.4 million in January-September 2008. A going concern warning was attached to its financial report for the third quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on January 19, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009