Agrexco trustee wants worker cuts

For fresh fruit and vegetable marketing and distribution in Asia
Carl Collen

BY CARL COLLEN

Agrexco trustee wants worker cuts

Lack of cooperation cited as reason for Shlomo Nass to attempt to cut Agrexco's workforce and send others on unpaid leave

Agrexco trustee wants worker cuts

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In the latest twist in the tale at Israeli fresh produce giant Agrexco, Dr Shlomo Nass, the court-appointed trustee of the troubled group, has reportedly requested approval from the Tel Aviv District Court to send some workers on unpaid leave, and to fire others.

According to a report by national publication Globes, a written request by Nass to the court suggested that there had been a lack of cooperation from workers, and that these employees had 'bypassed agreements' formed between them and the trustee, burdening the company and leading to a 'significant deficit' in operations.

In an exclusive interview with Eurofruit last week, Nass said that all professional staff had continued to work as normal through the two-week freezing period implemented on Agrexco by the District Court, although he admitted that there had "naturally been some slowing down" of operations.

However, in the letter, Nass said that there had been a 'lack of cooperation' from workers in various areas, making it difficult for Agrexco to function properly, while he also presented the workers committee with a list of employees that he is aiming to dismiss in order to reduce costs. Nass also suggested sending workers who were 'not needed to run the company at the current volume of activity' on unpaid leave for two weeks

Nass admitted that workers were currently trying to delay the verdict, but warned that "every day this is delayed, the deficit grows", Globes reported.

Responding to the news, Agrexco workers' committee head Shaul Tzivoni told Globes that the move amounted to "the state of Israel cynically abusing workers".

"After Agrexco employees were the first to contribute part of the NIS2m for the benefit of the operating period, the trustee says that 200 workers will not receive their salary in July, although they just gave up two weeks f salary, and now he is asking for another two week's worth. It is also interesting that the trustee is keeping the outgoing CEO on as a special consultant."

The financial troubles at Agrexco, which exports Israeli agricultural produce under the Carmel and Alesia brands, first came to light when Globes revealed that rating company Midroog had downgraded the company's bonds by seven grades to a speculative B1 with a negative outlook.

The downgrade was attributed to a "substantial worsening" in Agrexco's business results and a one-time €16.7m write-down in assets.

Globes also reported that Agrexco has debts of €106m, including €35.2m to Israeli banks, €6m to foreign banks, €27.3m to bondholders, €2.1m to employees and local authorities, and €58m to uninsured creditors including suppliers and customers.

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