Africa-Israel Industries Ltd. (TASE: AFID) has arranged the sale of Negev Ceramics with the banking system concurrently with its debt arrangement with the banks.
Under the agreement, Negev Ceramics will allocate to the Viola Credit lending fund ordinary shares that will constitute 100% of its issued and paid-in share capital after the allocation. Viola Credit will also invest NIS 75 million in Negev Ceramics.
As part of the agreement, Viola Credit will deposit NIS 10 million in trust for Negev Ceramics. If the deal does not go through, the deposit will be foreclosed as compensation agreed by the parties.
Africa-Israel Industries and Negev group CEO Yaki Vadmani said, "Today, the company management is saying goodbye to Negev Ceramics, a company that has been associated with the Africa-Israel group for many years, with mixed feelings, as a result of the difficult challenges the company has faced in recent years.
"In view of the difficult situation that has emerged, the only concern of the group's management was saving the company by continuing its existence and preserving the jobs of hundreds of its employees all over Israel, while making sure that the company's suppliers and customers are not damaged during this process."
Viola Credit founder and general partner Ruth Simha said, "We regard Negev Ceramics as a veteran Israeli company and a leader in its sector, with a leading and beloved brand and dedicated employees. We are confident that with excellent management, cutting its debt, and a new injection of money, the company can once again be stable and prosperous, as it was for many years, ensuring a stable home for its hundreds of dedicated employees."
The deal includes rescheduling NIS 260 million in bank debt, plus the injection of NIS 75 million into Negev Ceramics in order to improve its cash flow. Following the acquisition, the buyers announced the appointment of Uri Gilboa as CEO of Negev Ceramics.
The Barnea & Co. law firm advised Viola Credit in the acquisition.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 4, 2017
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