There are grave fears in the publishing industry that bookseller Steimatzky Group Ltd. is suffering liquidity problems. Sources inform "Globes" that the bookshop chain has halted payments to publishers of the books that it has sold. Payments already due have been delayed by several days, and have exceeded the acceptable situation for payments between the chain and publishers who are paid 60-100 days after books are sold.
Steimatzky is owned by private equity fund Markstone Capital Partners Group LLC, which is struggling to pay the debts of another of the companies it owns Phenomenal Holdings (formerly Prisma Investment House). Following the collapse of Prisma, which left huge debts, Markstone recently began talks with Phenomenal's bondholders for a debt settlement.
The company said today that the delay in payments was due to the sudden death of Steimatzky chairman and Markstone co-manager Amir Kess who was killed in a road accident last Thursday. Steimatzky told "Globes," "In the shadow of the terrible tragedy that occurred, Steimatzky has been told that the Fund (Markstone) is in a situation of being reorganized, and is handling all matters as swiftly as possible."
It remains unclear whether Kess's tragic death is delaying payments or whether Steimatzky does indeed have liquidity problems. But just last week Steimatzky CEO Iris Barel told journalists that March had been "catastrophic with a drastic fall in sales." She attributed the fall in sales to the new Book Law and market conditions in general.
Published by Globes [online], Israel business news - www.globes-online.com - on April 7, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014
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