Some 300 workers from Israeli exporter Agrexco have demonstrated in Jerusalem demanding that the government injects around €15 million in rescue capital as the firm grapples with mounting losses and debts.
Agrexco, whose major shareholders are local farmers (60 per cent of the capital) and the Israeli state (30 per cent), posted a net loss of €33m last year from revenue of some €490m. The group attributed the deficit to reduced market share in Europe, the weakness of the euro and climatic events in Israel.
It owes an estimated €32m to institutional investors to whom it issued bonds in 2007.
There is speculation in the local media that Agrexco has reached a deal with its main creditors to convert 35 per cent of this debt to 10 per cent of its equity.
The agreement is also said to make provision for the remainder of the debt to be paid back over a longer period. In return, the state will inject capital into the company and make a partial payment in cash.
However, staff unions fear that any agreement reached with creditors will also entail a commitment on Agrexco’s part to reduce running costs which will include redundancies.
The Israeli government is keeping tight-lipped on its intentions, raising fears that it could refuse a fresh bailout. At the end of 2010, it injected €11.3m into Agrexco after the company failed to meet shareholders’ equity conditions.
Local reports also highlight Agrexco’s debt of €60m in a deal to lease two refrigeration vessels from Ofer Shipping.
Agrexco could not be reached for comment.
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