Credit Insurers Cut Exposure to Sakal

Credit insurance companies have recently decided to cut back on their exposure to the Sakal group, Haaretz has learned.

This decision has two major results: The reduction of the amount of Sakal's credit insured by the group; and an increase in the premium paid to insure payment for credit transactions.

A senior official in one of the credit insurance firms said that this is a routine procedure, resulting from a periodic appraisal made for a number of clients, including Sakal. He added that while the risk involved for the Sakal group may have risen, it is still far from the situation of the Clubmarket chain before it collapsed.

The entire Sakal group, including the duty-free, sport and electronics stores are all considered as a single business for the purposes of credit insurance; since they are a group of private companies, the decline of fortunes of one firm could affect the situation of all the others in the group.

Sakal is interested in selling 30 percent of the group, as well as finding investors who would become partners in the Sakal Electric and Sakal Sport stores.

As far as is known, Sakal has negotiated with the Skye fund, placing a value of $70 million on the group; and with the Fox fashion chain, which is interested in a partnership in the sports stores. Economist Dan Tahori is in charge of the search for investors for Sakal.

In the past Sakal has claimed that it was interested in bringing in new investors not because there are financial problems, but in order to develop the group's businesses and to bring in outside CEOs to some of the firms.

The entry of an outside investor is likely to reduce the group's risk profiles, according to one of the insurance executives; and the failure to find an investor would probably have the opposite effect.

Before Rosh Hashanah, Sakal invited its suppliers to a small ceremony in its offices, revealing its business plan to them. The intention was to calm down the suppliers, according to one industry source.

Sakal continues to deny reports of financial troubles and claims that the source of such rumors is competitors out to hurt the group.

The group has in addition to the duty-free stores in Ben-Gurion International Airport, 20 Sakal Electric stores and over 60 Sakal Sport stores.

Sakal's spokeswoman said: "There is no significance to the information, since an important outside body such as BDI emphasised and published in its report [from three weeks ago] positive data on the matter of Sakal's supplier credit." She added: "Sakal is among the few in the electric and electronics sector whose suppliers enjoy having credit insurance." She continued: "Sakal has reduced its credit from suppliers to less than 2 percent of its turnover, a fact that makes the entire issue irrelevant."