Israeli fresh produce exporter Agrexco is due to meet with its creditors on Thursday, 23 June 2011, to discuss a possible debt settlement which reportedly may see those creditors demand the immediate repayment of €32m in loans.
The company, 30.3 per cent of which is owned by the Iraeli government, issued non-tradable bonds – essentially a means of borrowing money from investors – back in 2007, the balance of which is now understood to be €32m.
According to Israeli business title Globes, the company's outstanding financial debt is €83m and its cash reserves are below €10m.
Having made a loss of some €33m, Globes said, Agrexco's bondholders are considering their options.
Agrexco's poor results have prompted Israeli credit rating agency Midroog to downgrade the company's bonds from A3 to B1 (junk-bond status) with a negative outlook, a move which reportedly means it is not expected to be able to repay its debt in full.
Essentially, the challenge for Agrexco will be to secure longer-term loans by demonstrating to investors the viability of its business under recently installed chief executive David Bondi and following a planned reorganisation of the group's commercial structure.
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