Clubmarket's creditors arrangement, published by the troubled supermarket chain's trustees on Wednesday, has stirred up a sea of discontent among suppliers.
"The arrangement is not good for suppliers," said Nestle-Osem CEO Dan Propper. "They receive a very low return relative to guaranteed creditors. I believe the suppliers will object to the arrangement in its current form."
The precedent-setting write-off by banks on 20 percent of their debt is being portrayed as relatively limited.
"The banks are being generous with taking their share. While on the face of it they are writing off NIS 190 million, in practice, if one takes into account the NIS 100 million from credit cards and NIS 35 million from shareholders, they forfeited much less. If we look back, the suppliers increased credit to Clubmarket by NIS 90 million, which every one transfered to the banks in one way or the other before assets were frozen," said Propper.
"Suppliers are bearing the brunt of the burden, and the imbalance has to be addressed," he added.
Suppliers plan to work on altering the arrangement. According to Propper, "they have to start talking. A meeting is planned with major suppliers, and I gather we'll assert our rights either in the trustees meeting or beforehand, and certainly in court."
Food Industries Association chairman Ron Kobrovsk, who is also managing director of the Central Bottling Company (Coca-Cola Israel), stressed yesterday that the arrangement did not satisfy suppliers.
If the major suppliers - such as Nestle-Osem, Strauss-Elite, the Central Bottling Company, Procter & Gamble and Tnuva, among others - get organized, they can overturn the arrangement, because they account for more than 25 percent of debts owed.
Market executives said yesterday that all the major suppliers had already written off the debts in financial reports, and are aware of the payment they have to make to Supersol over time. Therefore, they won't approve an arrangement that leaves them losing from all angles.
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