"The banks are behaving cleverly," says Avraham Burg, the former Knesset member who today is a director at Vita Pri Hagalil. By which he means: "They'd rather take aim at me than at 500 Pri Hagalil workers."
The court will be ruling today on the banks' demand to appoint a receiver to Pri Hagalil and sell the thing, on the grounds that they didn't like any of the creditor arrangements being proposed by potential buyers. Burg, who had been among the company's controlling shareholders, believes, however, the company's problems can be solved, that it will be saved, and that its workers will be able to keep their jobs.
"When I came to the company in 2004, the plant was on the brink of bankruptcy," he says. "We restructured it and here's Pri Hagalil today, turning over NIS 2,760 million a year, with pretax profit of NIS 25 million, which is considered high in the food sector." The plant's problem is its debts, Burg explains. It owes the banks NIS 150 million. From 2001 to date, it has paid the banks NIS 20 million in principle and more than NIS 80 million in interest payments, and not missing any payments, he says.
But when the world financial system slipped into crisis, Pri Hagalil started having a cash flow problem, Burg says, discussions with the banks went nowhere. Now the banks believe their best option is receivership.
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