Troubled Israeli fresh produce company Agrexco, which exports its fruit and vegetables under the Carmel brand, has been granted a two-week stay of proceedings by the Tel Aviv District Court, reports Eurofruit's Carl Collen.
In a letter sent to growers, Agrexco's court-appointed trustee Dr Shlomo Nass revealed that the Tel Aviv District Court had extended its freezing of proceedings until 20 July 2011, while the court also confirmed and approved funding that the group is receiving to ensure it can operate during this period.
Nass said that the court had decided to allow Agrexco to continue with its normal activities under the rules of the procedure, and confirmed that "the consideration for the goods supplied by you (the growers) during the period of freezing of proceedings is guaranteed as of 30 June 2011".
The court ruled that without its explicit approval, the past debts of growers would not be paid for goods supplied before 30 June 2011, and Nass noted that it was the intention to hold a "fast examination" of the issue before filing an appropriate application to the court.
"In parallel and in accordance with the court's approval, I am acting for the selling of the company to an external investor - within a very short timetable," Nass added.
The letter to growers follows a report by Israeli business publication Globes that suggested Arko Holdings had offered to loan Agrexco €1.25m to allow the group to continue operating as a 'going concern', with Arko owner Arie Kotler believed to be keen on taking control of the company.
Globes revealed earlier in the week that the Israeli Ministry of Finance had offered funds totalling €500,000 to Agrexco during a proposed 60-day stay of proceedings, down on a recommended €1.75m.
The publication had previously quoted Nass as having said that failure to extend the stay of proceedings would see the debt-ridden company go into liquidation. "The employees will be fired, farmers will lose a lot of money and huge damage will be caused to Israeli agriculture and its reputation worldwide," he had said.
Globes 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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