While the banks have rejected all suggested compromises for Vita Pri Hagalil's debts, seven companies have lined up to file bids for the struggling canning company. All want it as a going concern: three are suggesting creditor arrangements, and four want to buy the company if the arrangements fall through.
Yesterday things were back to normal at Pri Hagalil after two days of protests by company workers. But the lull may be all too short-lived.
The special managers the court appointed to Pri Hagalil haven't given up on reaching an arrangement with the company's creditors and will be reopening discussions next week. Their aim is to keep the company functioning as a going concern. If none of their suggestions are accepted, receivers will take over to sell the company.
Pri Hagalil owes more than NIS 263 million, as of January 15, 2009. Among its creditors are banks - mainly Leumi and Discount, suppliers and its workers.
On Tuesday the Haifa District Court gave Pri Hagalil a week's grace, postponing by that time its ruling on the banks' motion to appoint a receiver to the company.
Any creditors' arrangement would involve a buyer taking over Pri Hagalil, paying some of the money owed to creditors, and injecting money into the company to keep it working. The court has agreed to allow three potential buyers that offered creditors arrangements, which the banks had rejected, to improve their offers.
Sky Fund had suggested that Pri Hagalil's assets and debts be transferred to a new company that Sky would establish. The new company would pay creditors NIS 114 million (44% of the debt), and allocate them 30% of the shares in the new company in exchange for forgiving the other 56% of the debt. Under that proposal, the banks would have received NIS 80 million. The banks were uncharmed.
Another group, with some of Pri Hagalil's present owners, suggested that the banks write off NIS 55 million of the debt (60%) in exchange for getting 20% of Pri Hagalil.
The banks were unamused.
Then there was Willi-Food's suggestion, including that the farmers supplying Pri Hagalil get all their money over time (NIS 27 million). The banks weren't interested.
If no creditor arrangement wins their approval, then to receivership Pri Hagalil will go. In that case, Zanlakol will offering the banks NIS 30 million, gaining Pri Hagalil's activities and assets, and its inventory at 85% of its value. Zanlakol has not undertaken to keep all Pri Hagalil's workers.
Pri Nir will be offering the banks NIS 37.5 million for the fixed assets and activities, including land, and has promised to keep all the workers.
Then there's fish canning company Starkist, which hasn't disclosed its bid yet, but said it's in the running. And there's a fourth company in the race which hasn't even disclosed its identity yet.
"We feel that the whole country is behind us," said Reuven Ben-Haim yesterday, describing the sentiment among the workers as they traveled home Tuesday evening from the Haifa District Court hearing. "We sang the whole way."
Ben-Haim, 49-year-old father of six, has been working at Pri Hagalil for 18 years, now as supervisor of the plant's cooling system. "We came home [to Hatzor Haglilit] from Haifa at 8 P.M. and by 5:45 the next morning I was at the plant. By six everything was working full blast. Nobody stayed home. I feel great. We're back to producing, not demonstrating. That's what we want to do. That's our purpose, to get back to work and produce. Work is our oxygen. I can't imagine myself without work."
The judge gave them eight more days to breathe, he said.
"I pray that the best solution will be found," he said. "The judge understood that the banks were behaving in bad faith towards us. It gave us a shred of hope."
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