'Banks to Blame for Troubles'

Both Hamashbir and the Manufacturers' Association blamed the banks for the chain's troubles yesterday.

Hamashbir CEO Yaacov Lifshitz charged the banks have not allowed his firm to utilize previously approved credit lines, while association president Oded Tyrah said the banks were treating Hamashbir much more harshly compared to other financially troubled companies.

Hamashbir owes the two major banks, Leumi and Hapoalim, only about NIS 430 million - not an exceptionally large sum by their standards - and its debts to the smaller banks total about NIS 40 million. Moreover, it has provided excellent collateral for these loans: Hapoalim and Leumi have liens on all its assets, including real estate assets: the chain's flagship store in Tel Aviv's Dizengoff Center, for instance, is mortgaged to Hapoalim. And furthermore, the banks agree the chain is economically viable.

Nevertheless, they have been reluctant to provide additional loans. Though one bank has apparently said it would be willing to provide additional money, it is setting stringent conditions regarding the necessary collateral and may refuse to provide the loan unless it is guaranteed by the state.

The banks, however, reject Lifshitz's and Tyrah's accusations. Instead, they point an accusing finger at Hamashbir's parent companies - Co-Op Blue Square (80 percent) and Co-Op Zafon (20 percent). Both companies are cash-rich, the banks say, yet have refused to give Hamashbir any help, since they are in the process of being sold and fear that aiding chain could disrupt the sales process.

"These are companies with a lot of money, and they should take responsibility," said a banking source.