Jerusalem contractor Eli Barashi & Sons Earthmoving Works & Development Ltd. has asked the Jerusalem District Court for a stay of proceedings after accumulating NIS 55 million in debts and entering financial difficulties.
The court issued the stay of proceeding until the beginning of May, when it will hold the first hearing in the presence of the company's creditors and receiver.
Barashi & Sons is one of the oldest contractors in Jerusalem. It has carried out projects for the Ministry of Defense, including work on the separation fence and along the seam line, the Jerusalem light railway, and Israel National Roads Company Ltd..
On the the Jerusalem light railway, Barashi & Sons is a subcontractor for Ashtrom Properties Ltd. (TASE:ASPR) for work in the city center along Jaffa Street, and there is concern that the project could be delayed further.
Sources inform ''Globes'' that because of Barashi & Sons' problems, the National Roads Company has issued a removal order from two projects, worth NIS 20 million.
The court issued the stay of proceedings after Bank Leumi (TASE: LUMI) restricted Barashi & Sons' bank account.
The recession has severely affected small and mid-sized subcontractors as the credit crunch and tighter bank credit terms have made it more difficult for them to recycle debt.
Published by Globes [online], Israel business news - www.globes-online.com - on April 22, 2009
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