The G Group, the lead party in the investor group that is buying the Steimatzky bookstore chain, has reached an agreement with Israel’s three biggest publishing houses, according to which the publishers will forgo 30% of the company’s debts to them. Initially only Kinneret Zmora-Bitan agreed to the demand, but on Thursday Yedioth Books and Keter Books followed suit.
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The G Group is controlled by television pitchwoman Yafit Greenberg, better known as Gimel Yafit. Her investor group signed an agreement this month to acquire Steimatzky, which along with Tzomet Sfarim dominates the retail book market in Israel, from Markstone Capital.
Yedioth Books also agreed to a six-month delay in receiving the remainder still owed by Steimatzky after the 30% haircut. In addition, smaller houses affiliated with Yedioth, including Books in the Attic (Sifrey Aliyat Hagag in Hebrew) and Ahuzat Bayit, also agreed to the debt restructuring.
As of the end of last week, other Israeli publishing houses, including Am Oved and Modan, had not agreed to forgive the book chain’s debt, but now that the big players are on board it is considered unlikely that they can continue to hold out.
But the legality of the “haircut” is still not clear. The Economy Ministry is examining whether a provision of the book pricing law that went into effect in February prohibits debt forgiveness of this kind, as some industry figures have suggested.
The new law, aimed at insuring that authors are paid fairly for their work, prohibits retail discounts on new books for the first 18 months following publication, with certain exceptions.
The publishers that agreed to the write-offs confirmed that it was across the board and applied to money owed for both new released and books from their back catalogues.
Steimatzky said in a response that it complies fully with all laws, including the book pricing law.