Israeli homeware and kitchenware company Soltam Radad, noted as a high-quality brand, is in financial difficulties. Yesterday, the company filed a petition for protection against its creditors in the Lod District Court. It says it has debts totaling NIS 60 million which it is unable to repay. The petition is also for a stay of proceedings against the controlling shareholders in the company and the guarantors of its debts, Amira Lieberman and members of her family, David Lieberman, Debby Doron and Amos Doron, and for the appointment of Adv. Amit Pines as trustee for recovery proceedings.
"In the past year, the company has encountered liquidity which, at the time of the filing of this petition, do not allow it to make regular, routine repayments of its liabilities to its creditors, mainly to its financing banks," the petition states. The company attributes its difficulties to a fall in sales as a result of the entry of new competitors in to its market, delay in the receipt of a substantial payment from supermarket chain Shufersal, and the operation in Gaza in 2014 that it says adversely affected its sales in advance of the Jewish New Year which usually account for a substantial part of its turnover.
Soltam Radad was set up in 2001 following the merger of veteran brand Soltam, founded in 1950 by Solel Boneh, Finnish artillery and mortar manufacturer Tampella, and Shlomo Zabludowicz, with Radad, owned by the Lieberman family and also a veteran Israeli company. Soltam was originally a manufacturer of artillery and munitions that diversified into kitchen pots and pans. The defense business, Soltam Systems, was sold to Koor before being bought by Elbit Systems in 2010.
Soltam produces, imports and sells a variety of cooking and homeware products, and has 17 stores around Israel. Its main debts are to Discount Bank (NIS 23.3 million), Bank Mizrahi-Tefahot (NIS 3.2 million), Bank Hapoalim (NIS 6.6 million) Mercanile Discount Bank (NIS 3.6 million), and Bank Poalei Agudat Israel (NIS 3 million). It owes its employees NIS 530,000.
The petition also contains a proposal for the company's recovery and the payment of its debts. The petition says that there is an "initial but practical" offer from Mayo AY Investments for investment of NIS 16 million in it as a going concern. "This proposal, or one like it, will make it possible to preserve the employment security of the company's employees and to keep employing them. The consideration, together with a contribution from the owners and the sale of company assets will yield immeasurably greater value to the creditors than can be expected to be received in a liquidation and insolvency," the petition says. According to the petition, the Mayo family, which was the owner of kitchenware company Naaman, has the experience and financial wherewithal to rehabilitate Soltam-Radad.
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2015
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