Owners, suppliers to offer NIS 70 million to save Vita
In essence, the offer is the same one the banks rejected about six weeks ago.
The financially troubled food manufacturer Vita Pri-Galil is expected to submit a NIS 60-70 million recovery plan, funded jointly by owners and suppliers, to a court convening today to deliberate whether to put the company into receivership. According to sources close to controlling shareholders, most of the money will come from the farmers' organizations that work with Vita, in the form of short-term loans.
In essence, the offer is the same one the banks rejected about six weeks ago. "We're not asking the banks for loans, we're only asking them to suspend repayment of the interest [on loans already extended]," a source said while describing the proposal that will be put forth today.
Vita Pri-Galil manufactures, imports, purchases and markets processed fruits and vegetables, as well as processed foods including sauces, pasta, soup nuts, cooking oils, powdered soups and cake mixes. It also sells frozen vegetables and chilled, prepared foods, markets ready-made cakes under the Kapulsky label and Rich's cakes and whipped toppings. The company has about 500 employees.
Sales in January-September 2008 came to NIS 192 million, operating profits exceeded NIS 10 million and the bottom line was a loss of about NIS 7.5 million. The company ended 2007 with sales of NIS 269 million, operating profits of some NIS 18 million and losses of about NIS 3.5 million.
Vita Pri-Galil main shareholders include Ian Davis (about 30%), Aviv Algor (about 24%) and Rich Products Corp. of the United States (10%).
Workers are planning to demonstrate today near the company's plant at the entrance to the Upper Galilee town of Hatzor Haglilit to protest the facility's threatened closure and the job losses that would entail.
"Closing the plant, which at the height of the season season employs 600 workers, would be an economic disaster for the Galilee panhandle, and in particular Hatzor Haglilit and Tuba-Zangaria where most Vita Pri-Galil workers live," the chairman of the Upper Galilee District labor council, Yona Partok, said last night. He added that it would also hurt local suppliers.