Israel: Agrexco set for liquidation
Agricultural produce exporter Agrexco is set for liquidation.
Agricultural produce exporter Agrexco is set for liquidation.
The only offer for the company from Kislev Forwarding and Custom Clearance Ltd. owned by Zvi Grinberg is now longer relevant, Tel Aviv District Court Judge Varda Alshech was told today during a debate on the company's stay of proceedings.
The trustee Adv. Shlomo Nass will now try to sell Agrexco as a "going concern" but will no longer be able to sell the company in its entirety.
The trustee Adv. Shlomo Nass will now try to sell Agrexco as a "going concern" but will no longer be able to sell the company in its entirety.
Judge Varda Alshech will rule on the matter tomorrow.
On Sunday, the company's bondholders rejected a debt settlement offer by the government controlled company which would have included a "haircut" of more than 80%.
On Sunday, the company's bondholders rejected a debt settlement offer by the government controlled company which would have included a "haircut" of more than 80%.
The bondholders' rejection was unanimous and they expect other unsecured creditors to join them.
The Government Companies Authority owns 30% of Agrexco, Tnuva Food Industries Ltd. owns 11%, and the Plants Production and Marketing Board owns 57%. The Plants Production and Marketing Board is controlled by the Ministry of Finance and the Ministry of Agriculture, basically rendering it another branch of the government.
The Government Companies Authority owns 30% of Agrexco, Tnuva Food Industries Ltd. owns 11%, and the Plants Production and Marketing Board owns 57%. The Plants Production and Marketing Board is controlled by the Ministry of Finance and the Ministry of Agriculture, basically rendering it another branch of the government.
The institutional bondholders claim that they invested in Agrexco in the understanding that a government controlled company would guarantee it should it ever become mired in difficulties, and that now the government was shirking its responsibilities with a "shrug of the shoulders."
Misled bondholders
Misled bondholders
Barlev Investigative Auditing states in its report on Agrexco that it certainly misled and manipulated its official financial reports and presentations, amounting to possible criminal misconduct.
The manipulations affected the NIS 200 million that Agrexco raised in its bond issue.
The manipulations affected the NIS 200 million that Agrexco raised in its bond issue.
Barlev says, "The financial reports that were the main tool that the bondholders used in deciding on the investment, in protecting their debts, and in rating the bond, did not properly reflect, to put it mildly, the transactions carried out and the material data of the company on the basis of accepted accounting practices."
Barlev says, "Agexco's financial reports misstated its shareholders' equity, assets, liabilities, and operating results. These misstatements were made consistently in all the financial reports published since the bond was issue, and apparently beforehand as well."
Source: Globes
Publication date: 8/30/2011
Source: Globes
Publication date: 8/30/2011
