Lod District Court Judge Ilan Shiloh today ordered the controlling shareholders in Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI), the parent company of the Mega retail chain, to find a solution for the chain's working capital, so that a debt arrangement can be reached. In the hearing, attended by the Alon Holdings Blue Square controlling shareholders and the leaders of the group, as well are representatives of the banks and a few representatives of suppliers, Judge Shiloh asked Alon Blue Square to increase its injection into the Mega chain. The parent company initially refused, claiming that the injection it was making was enough.
Shraga Biran, one of the Alon Blue Square controlling shareholders, who had not attended any of the previous court sessions, was in attendance, while David Wiessman, the other controlling shareholder, chose not to appear in court. Granot Central Cooperative chairman Amit Ben Itzhak, representing the kibbutzim, also attended the court session. 90 minutes after the hearing began, Judge Shiloh ordered the media and all of Mega's creditors removed from the courtroom, surprisingly deciding to hold a closed hearing with only the controlling shareholders and the banks.
At the demand of the banks, Alon Holdings Blue Square improved its offer, agreeing to inject NIS 160 million into Mega as capital, in addition to providing a NIS 160 million guarantee and line of credit as a loan to the chain, to be repaid to the controlling shareholder from Mega's profits, if any, starting in 2020. This was a significant change from the original offer of only NIS 240 million. As of web posting, no final decision had been made on the matter, because the parties were discussing the terms.
Published by Globes [online], Israel business news - www.globes-online.com - on July 14, 2015
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