Hamashbir 365, which is controlled by Rami Shavit, reported on Sunday that it had signed a memorandum of understanding to sell its Office Depot business to the chain's CEO, Tzahi Fishbein, who will not have to put up any money.
Fishbein, who is expected to recruit a group of investors to finance the sale, is required under the agreement to invest NIS 30 million in the chain.
Hamashbir acquired Office Depot less than two years ago for NIS 180 million as part of an expansion strategy Shavit was implementing. However, accounting problems at Office Depot led to its reporting a loss of NIS 37 million last year, saddling it with negative working capital in the order of NIS 35 million. That led to the resignation of its previous CEO and to Fishbein's appointment.
In the framework of the memorandum of understanding announced Sunday, the two sides agreed to work together to increase Office Depot's credit lines from the banks, to close money-losing branches, to seek better terms on leases and to renegotiate the licensing agreement with Office Depot's global franchiser.
Office Depot had recently announced plans to shutter 10 of its 52 stories. "We certainly want to close money-losing branches - [but] if we can reach agreements on lower rents then we won't close them," Fishbein told TheMarker.
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