Alon Blue Square, the parent company of the financially troubled supermarket chain Mega, got two weeks of breathing room yesterday after bondholders agreed to delay a 54 million-shekel ($13.8 million) repayment due them and not disrupt a bailout plan.
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But the fate of Mega still hung in the balance, with suppliers expressing concern about the financial health of the retailer and its parent company, and threatening to reduce deliveries or toughen payment terms.
Shares of Alon, which has 520 million shekels of debt to banks and 384 million to bondholders, took another tumble yesterday, dropping 14.4% to end at 1.22 shekels. Rival supermarket chains, which investors expect will benefit from Mega’s woes, rallied. Supersol rose 8.7% to 11.03 and Rami Levy advanced 8% to 184.50.
Still, Alon and Mega said they were determined to come to terms with creditors and turn around the business.
“You have to look at the positive side of recent developments and the feedback I’ve been getting,” said Raviv Brookmayer, Mega’s CEO. “At Mega we need industrial peace, we need the cooperation of the suppliers, we need to bring back the customers to the stores and preserve our sales momentum.”