Over the past week, Zvi Barinboim has begun to understand why IDB Holding Corp. (TASE: IDBH) chairman Nochi Dankner sold him the controlling interest in Polgat (TASE:PLGT1; PLGT4) for an ostensibly low price, which cost IDB Holding sub-subsidiary Clal Industries and Investments (TASE: CII) a NIS 10 million loss: the problematic partnership in a Polgat subsidiary in Turkey; and the company's 500 employees at its factory in Kiryat Gat, who may soon find themselves out of work.
Barinboim's first act after taking over Polgat was to sell its stake in Guney Polgat for $1. The sale was intended to put an end to the subsidiary's losses, and the amount of attention it required, while simultaneously transferring responsibility for the Kiryat Gat factory to the buyer. This move has apparently run into trouble.
On Tuesday, Guney Sanayi announced that it would exercise its first refusal rights to buy Polgat's 51% stake in Guney Polgat.
Today, the 470 employees of Guney Polgat subsidiary Polgat Textiles, and the 140 employees of Polgat subsidiary Bagir, petitioned the court to block the distribution of a NIS 152 million dividend by Polgat until compensation for the employees is guaranteed. The employees claim that Guney Sanayi is financially troubled, and that the sale or distribution of a dividend are liable to bring about the collapse, and closure of Polgat Textiles.
Published by Globes [online], Israel business news - www.globes.co.il - on February 10, 2005