Hed Arzi's financial reports show that Israel Land Development, controlled by the Nimrodi family, placed NIS 16 million of collateral at its disposal so that Hed Arzi, rather than Ma'ariv, could receive bank loans. Ma'ariv holds 82.6% of Hed Arzi shares. Hed Arzi is a distributor of recreational products (music, books, video cassettes and games).
Ron Weisberg, general manager of the Israel Land Development group, said today that there is no dispute between the Nimrodi family and its Ma’ariv partner Vladimir Gusinsky (25%) over the financing of Ma’ariv subsidiary Hed Arzi’s business.
The loans are designed for expansion of the Tower Records chain in Israel, which has caused Hed Arzi heavy losses in recent years. In 1998-2000, Tower's losses totaled NIS 43 million.
Weisberg said that Hed Arzi has been managed by Israel Land Development for many years. He said he hoped that with the financial backing provided by Israel Land Development, “Hed Arzi will gradually become an integral part of the Ma’ariv group, which is its natural place. At the moment, Hed Arzi has a formal place within Ma’ariv.”
Published by Israel's Business Arena on 16 April, 2001