Sources inform ''Globes'' that Zaki Rakib and Ofer Nimrodi are in preliminary talks to bring Israeli tycoons as partners into financially troubled Ma'ariv Holdings Ltd. (TASE: MARV), the publisher of Hebrew daily "Ma'ariv".
The sources added that Adv. Ram Caspi is handing the negotiations. As "Globes" first reported, Rakib wants to take Ma'ariv Holdings private.
"Ma'ariv" is operating under a comprehensive cutbacks plan, which will last several months, and include 400 layoffs. The paper is firing 120 employees this month. Most of the layoffs are in the paper's business section, but key correspondents from the news desk and other sections have also been let go.
Last Tuesday, Ma'ariv Holdings notified the TASE that Rakib may inject up to NIS 40 million directly into Ma'ariv Holdings' wholly-owned newspaper subsidiary Ma'ariv-Modi'in Publishing House Ltd., which would give him a 60% holding in the subsidiary, without changing his stake in Ma'ariv Holdings.
Rakib owns 30% of Ma'ariv Holdings, which he controls together with the Nimrodi family-controlled Israel Land Development Company (TASE: ILDC). If Rakib makes the investment, Ma'ariv Holdings' stake in Ma'ariv-Modi'in will fall to 40%.
This would give Rakib control of the newspaper, which is Ma'ariv Holdings' main asset, without increasing his share of the company's debts to the banks and bondholders.
Sources close to Rakib say that his economic advisors have recently advised him to abandon his investment in Ma'ariv Holdings. There have been reports that when Rakib invested $15 million in the company last year, he was unaware of the newspaper's dire condition. Ma'ariv's losses are now five time what Rakib initially thought. Aides say that he ultimately decided to stay in Ma'ariv because of his promise to its employees.
In the statement to the TASE, Ma'ariv Holdings said that Rakib was committed to the capital injection, subject to certain conditions, including the sale of the printing works, the proceeds of which printer would go toward repaying Ma'ariv's debt to the banks. He also insists on the conversion of his owner's loan into Ma'ariv shares, and cancelling Ma'ariv-Modi'in guarantees to Ma'ariv Holdings. Ma'ariv Holdings added that Rakib was prepared to inject the capital immediately.
Published by Globes [online], Israel business news - www.globes-online.com - on March 21, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011