A life belt may have been thrown to the employees of Office Depot Israel. Retail Group 3000 Ltd., owned by Ronen Levy, has improved its offer to acquire the retail chain's activity. Levy says that he has obtained the agreement from most of the malls to continue the operations of Office Depot stores.
Retail Group is offering NIS 1.4 million for Office Depot Israel's activity, inventory, and fixed assets. Office Depot Israel books the value of its inventory at NIS 24 million, and the value of its fixed assets at NIS 56 million. Retail Group's offer includes a promise to employ 65% of Office Depot Israel's employees (about 500 people) in the first year, and to pay 10% of the net profit in 2014-16 to the liquidators' account.
Today, Levy asked Minister of Finance Yair Lapid for government aid. He said that the government is under pressure from another possible wave of layoffs. "I called Yair Lapid, and he called me back within an hour, and he acted," Levy told "Globes". "The finance minister spoke with me several times yesterday, and promised to do what he could to help, because it is difficult for them to help the private sector. I asked for National Insurance to pay the first month of employees' salaries or for a government guarantee for a NIS 20 million credit line.
"They cannot do this, but they're making an effort to get this from the banks. They want to persuade the banks to allocate some amount without guarantees. The Finance Minister's Bureau approached Zion Kenan (the CEO of Bank Hapoalim (TASE: POLI) - I.H.), and I have a meeting with the bank's representatives this afternoon."
"Globes": Will National Insurance pay salaries for one month?
Levy: "They're looking into it, and they're prepared to help."
Why should you be helped? You're businessmen. There is inventory and assets worth much more than you're offering.
"The inventory is rubbish. They have markers that don’t write and computers that don’t work."
Under what label will you operate the chain?
"Office Express, or maybe Office Depot, if I can reach a deal with Office Depot Inc. I haven’t completed the correspondence with them."
How long will Office Depot Israel exist if your offer is approved?
"It will again become a going concern, and I intend to open 30 more 200-square meter branches under franchises within two years."
Office Depot Israel trustee Adv. Israel Bachar told "Globes", "We're interested in the deal with Retail Group 3000, and we're trying to carry it out. We have some more hurdles to overcome, which we hope to pass by Sunday. The moment there's a written agreement with the malls, we'll ask the court to approve the deal. Everything is intended to save the company's employees."
Bank Hapoalim was unavailable for comment.
Published by Globes [online], Israel business news - www.globes-online.com - on November 21, 2013
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