Sale of Steimatzky, Israel's Largest Book Chain, Completed

Yafit Greenberg's G Group purchases debt-ridden retailer; convinces many suppliers to write off part of debt.

Daniel Tchetchik

The investor group headed by television pitchwoman Yafit Greenberg’s G Group said Sunday it had completed the purchase from Markstone Capital Group of Steimatzky, Israel’s biggest book retailer. The sale price was not disclosed.

Greenberg, who is better known to television viewers as Gimel Yafit, said the conditions that needed to complete the sale of the financially troubled retailer had been met. This apparently included an assurance that they would not be assuming Steimatzky’s debts to Deutsche Bank and to the jewelry retail chain Magnolia, another company in the Markstone portfolio.

Although the sale was announced last week, industry figures had expressed doubt that it would actually go through after Greenberg reached an agreement to buy control of Channel 10 earlier in the year, only for the sale to fall through later.

In the lead-up to the sale, the buyers approached Steimatzky’s suppliers, including major book publishers, in an effort to get them to write off 30% of its debt and stretch out the remaining payments over six months. They are estimated to be owed more than 50 million shekels ($14.5 million).

In its statement, Greenberg’s group thanked the suppliers for doing their part to enable the sale to be completed, although some suppliers reportedly refused to accede to the buyers’ terms. Sources close to the Greenberg’s group said more than 30 publishers have given their consent in principle to the debt plan.

Kinneret Zmora-Bitan, as well as smaller publishers, all agreed to the conditions, but Yedioth Books and Keter Publishing and their affiliates have so far not consented and may oppose the sale, perhaps even resorting to legal action. Some of Steimatzky’s creditors may themselves seek to acquire the chain. Some publishers have expressed concern that the investor group headed by Greenberg has not provided them with any financial guarantees.

The Greenberg group said that over the next few years it would be depositing money equal to at least 50% of a fund set aside for severance pay for employees. Lawyers representing some of Steimatzky’s staff said the fund had been emptied and demanded that the buyers inject 100% of the money earmarked for the fund.

Ofer Vaknin