Embattled Negev Textile Offered NIS 3 Million Loan to Head Off Its Closure

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A proposed NIS 3 million loan may keep the troubled Negev Textile company open, although the owner of the plant has yet to accept the deal outlined last Tuesday.

The factory, which is located in Sderot on the border with the Gaza Strip, had been on the verge of closure, and management had been seeking a NIS 3 million government grant to save the jobs of its 50 or so employees.

The owner must now decide if he can be satisfied with the proposed loan, which would be supplemented by a NIS 250,000 government grant to enable the company to convert to natural gas, which would cut the plant's energy bills substantially.

The latest plan calls for the owner to guarantee 25% of the NIS 3 million loan, while the government and Manufacturers Association are to stand behind the remaining 75% - each guaranteeing 37.5%, Economy Minister Naftali Bennett told TheMarker.

The new plan was developed with the involvement of Bennett, Finance Minister Yair Lapid and the president of the Manufacturers Association, Zvi Oren.

Negev Textile CEO Uri Hadar said he has not yet spoken to the owner of the company, who is abroad, but expressed optimism that the plan would go forward. "I see that the two sides have good intentions, so I expect that the plant has a chance," Hadar said. "I am very optimistic. They have made a big step to come closer to our position."

In the event the owner does not accept the current offer, the Economy Ministry has drawn up a plan to place Negev Textile's workforce in other jobs in the Sderot area. "There are commitments to take in 45 Negev Textile workers at factories in the area," Bennett said. "We will make available any necessary sum for professional retraining," he added, in addition to other grants.

The company had also asked the Sderot Municipality to exempt Negev Textile from paying municipal taxes, Bennett said, but Sderot Mayor David Buskila said the city could not grant such a request.

The Negev Textiles plant shut down in 2013.Credit: Eliyahu Hershkovitz.

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