The Tel Aviv District Court will rule on the two offers for agricultural produce exporter Agrexco tomorrow: Kislev Forwarding and Customs Clearing Ltd., owned by Zvi Grinberg, and private equity fund Vertical Capital Group. Judge Varda Alshech will also decide whether to extend Agrexco's stay of proceedings, which was issued in late June.
Despite initial interest in Agrexco, there are now only two serious contenders for the company: Kislev, which owns 14 companies in Israel; and Vertical Capital Group, which owns 27 companies around the world, including Europe's largest flower marketing company, Italy's Ciccolella SpA (BIT: CC). Kislev is offering NIS 90 million in several installments for Agrexco, while Vertical Capital Group is offering €24 million in two installments, first €9 million and €15 million later.
"I have never seen such conduct by shareholders," Alshech told the government's representative at today's hearing on Agrexco. "I am not prepared that Adv. Nass will again string me out until the hearing. Why are we hearing about these offers for the first time today? If there is no detailed offer the next time, I will void the stay of proceedings and Agrexco will be liquidated. There is no point in examining an offer that looks like Swiss cheese."
Agrexco trustee Shlomo Nass replied, "Until 30 seconds ago, I didn’t know what I was going to say. In my 30 years in this business, I have never encountered such a difficult case. For 56 years, they've been trying to bring customers to the company, and if it goes under, hundreds of suppliers and growers will collapse. The company won't go down the drain, and it will continue to exist for everyone's benefit. We've collected over €45 million in arrears and current operations. The main problem for potential investors is to ensure that growers will stay with the company. The problem of over-centralization caused several bidders to quit precisely for this reason. We received offers of €3-5 million for the company."
Government-owned Agrexco markets Israeli produce abroad under the Carmel and Alesia brands. It mainly operates in September through June. The company lost €33 million in 2010, bringing its debts to €106 million, including €27 million to bondholders.
Published by Globes [online], Israel business news - www.globes-online.com - on August 10, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011