The Israeli government is continuing to evade its responsibility to agricultural produce export company Agrexco. Ministry of Finance representatives today refused to provide the company financing of €1.75 million during proposed 60-day stay of proceedings and offered only €500,000.
The Tel Aviv District Court instructed the government and the other shareholders and creditors to make clear how much money they are prepared to inject into the company, to finance operations over the next two months.
The creditor banks today agreed to finance 15% of Agrexco's expenses, while Tnuva Food Industries Ltd., which owns 11% of Agrexco, is the only shareholder which has agreed to inject capital in proportion to its holdings. The government owns 30.3% of the company but has a majority on the board of directors.
At the end of today's court discussions, Judge Varda Alshech decided to extend the temporary stay of proceedings that began last Thursday by one more day until tomorrow. She said, "I hope the trustee Shlomo Nass will succeed in his task but I am very skeptical."
Court appointed trustee Adv. Shlomo Nass said yesterday that Agrexco will be forced into liquidation if the court cannot be persuaded to extend the stay of proceedings for 60 days, during which time Nass will seek a major investor for the troubled company.
Nass told "Globes", "To our regret there are officials who do not care what happens to the state. They are only interested in pennies and all sorts of economic calculations. They are not interested in what the court says or the Knesset Finance Committee or even the ministers. It is a disgrace that the state is managed in this way in the 21st century."
A senior Ministry of Finance official told "Globes." "We are seeking to change the impression that the Treasury is watching Agrexco collapse and not doing anything."
He said that the government is prepared to inject capital but "the sums described by the trustee seem exaggerated and we don't know how he reached them."
Published by Globes, Israel business news - www.globes-online.com - on July 4, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011