Sources inform "Globes" that the Mega retail chain is losing NIS 8-10 million a month, and is unable to reach the breakeven point. The NIS 50 million weekly sales target set by the trustees is also not being met, and the chain is having trouble reaching it. The gap between the target and actual sales means that Mega's losses are growing, in addition to the heavy losses caused in the first month of operating the chain under the trustees.
The operating plan submitted to the Court by the trustees estimated that the company would lose NIS 15 million in the first month of the stay of proceedings and only NIS 1.8 million in the second month. The actual losses, however, have been four times as large. The chain's losses are being directly subtracted from the creditors' fund, which includes the company's employees.
Mega's weekly sales are estimated at no more than NIS 40 million, or NIS 160 million a month. Mega operates with a gross profit ratio of 29%, and its regular monthly expenses include NIS 30 million for regular salary costs and NIS 25 million rent at its branches, management fees, municipal property tax, maintenance, information systems, etc. Even if Mega settles in at NIS 40 million in weekly sales, an NIS 8.6 million operating loss is projected to continue. Mega trustees Advocates Ehud Gindes and Amir Bartov and Gabi Trabelsi, CPA, announced two days ago that they were rejecting a pricing procedure for the chain, and intended to continue operating it until a worthy buyer is found.
Bartov told "Globes" that Mega was worth at least NIS 300 million. "Globes" today asked the trustees for figures on monthly sales and the pace of monthly losses for the chain. As of web posting, the trustees had not provided the figures. Earlier requests for the data were turned away. The trustees were also asked to disclose the fees they will receive for being trustees, the method used to calculate them, and the total monetary benefit they expect. This request also remained unanswered. The trustees said in response, "Figures and a report will be submitted to the Court when the time comes."
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2016
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