The 3,000 employees of Israel Military Industries Ltd. (IMI) did not receive their August salaries today, because of the company's cash flow problems. In view of the government company's inability to meet its payroll, the Ministry of Finance will, on Tuesday, ask the Knesset Finance Committee to approve NIS 100 million loan for the company. The government has repeatedly extended such loans in the past two years because IMI cannot raise the money to meet its NIS 60-70 million monthly payroll.
On Wednesday, IMI's board of directors will meet to approve the proposal for privatizing the company. The plan calls for the retirement of 950 employees, moving the company from Ramat Hasharon to the Negev and vacating the old site, and writing off the company NIS 2 billion debt to the government. The debt is the result of money transfers by the Ministry of Finance to cover the company's cash flow problems. The loan that the ministry will seek for the company tomorrow will never be repaid.
"We're again in the same saga, and not for the first time," IMI workers committee chairman Itzik Yehuda told "Globes" today in response to the non-payment of salaries. "We hope that the restructuring of the company will end this saga and we won't fall victim to the various quarrels between the Ministry of Finance and the Ministry of Defense, as has happened in the past. Had it wanted, the state could have privatized IMI a long time ago, saving a lot of money."
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013