Agrexco set for liquidation

The Tel Aviv District Court heard today that there are no offers for the troubled agricultural produce exporter.

30 August 11 10:07, Avi Shauly

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. 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%. 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 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."