Employees at Vita-Galilee Fruit Ltd. (Vita-Pri Galil) (TASE: VITA) returned to work today after the Haifa District Court last night suspended proceedings against the company for eight days and dismissed a request by Bank Leumi (TASE: LUMI) and Israel Discount Bank (TASE: DSCT) to appoint a receiver for the company.
In an interview with "Globes" yesterday, former Vita chairman and controlling shareholder Avraham Burg called the two banks' conduct over Vita hypocritical. He and the banks continued their mutual recriminations.
Hebrew daily "Ma'ariv" today quoted a senior banker's response to Burg's comment. "Where has the NIS 270 million injected into the plant gone?" he asked, and added, "Had the owners demonstrated serious intent to use the capital injection to rescue the company, there's no question that we'd contribute to the rescue effort. The owners' abandonment of responsibility is what forced us to ask for the appointment of a receiver. We had no choice."
In response, Burg told “IDF Radio" (Galei Zahal), "The banks' media offensive to divert the public struggle into a personal attack on me is very smart. It's a lot easier to fight me than to battle reality."
As for the alleged missing NIS 270 million, Burg said, "This NIS 270 million does not exist. I'd be happy to see the printout and argue with whoever says so. Since 2001, Vita has repaid NIS 20 million on the principle and NIS 80 million in interest on its NIS 150 million bank debt. You do the math on how much money the banks have gotten back during this period. I'm not narrow-minded, it's their business, but these are the numbers."
Former Labor Party MK Avraham Burg served as Speaker of the Knesset in 1999-2003, before turning to the private sector.
In a notice to the Tel Aviv Stock Exchange (TASE) today, Vita stated that a proposal for a settlement would be made by March 1, and that the company's creditors would convene on March 4, ahead of a court hearing the following day.
Published by Globes [online], Israel business news - www.globes-online.com - on February 25, 2009
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