According to Israeli news website, CTech, Landa has been saved from bankruptcy after The Central District Court approved the purchase of the company by FIMI, Israel’s largest industrial body.
According to the online magazine, which is owned by daily business and economics publication, Calcalist, under the reported agreement FIMI has acquired Landa Digital Printing and invested $80m (£59.2m) into its operations.
The deal means that FIMI will own 100% of Landa and will continue to employ the majority of its workforce. Judge Hana Kitsis approved the arrangement with Landa and FIMI, citing the safeguarding of employees and the minimal gains of a liquidation alternative.
At the end of June Landa filed for court protection following a shareholder exit leaving the company with total debts of around $516m (£377m). Much of the debt is owed to shareholders, including interest-bearing loans that can convert to equity if the company continues operating. CTech says the remaining debt is owed to suppliers, employees, and Mizrahi Tefahot Bank.
The Central District Court subsequently issued an order which allowed Landa to restructure without appointing a trustee. Following disputes and speculation of various purchasers, including HP, which famously bought Benny Landa’s Indigo technology in 2002 for $882m (approximately £591m at the time), the court approved the deal with FIMI on Saturday evening.
Speaking to the Israeli court during these proceedings, founder Benny Landa said: “After the sale of Indigo, I thought I was leaving the printing industry and moving into other fields, but then we discovered nano-pigment ink, we had a breakthrough, and I had to return to the field.”
Appealing to the court on the potential of the company’s technology, Benny Landa concluded: “We are at the beginning of a revolution, and we are alone in this field, we have no competitors worldwide. “Landa could become the largest printing company in the world. Since Johannes Gutenberg invented printing, the major players have all been German. We will bring the crown of the global printing industry to Israel and contribute significantly to the country’s GDP.”
Landa’s investors include Susanne Klatten, one of Europe’s richest women and heir to BMW. Klatten owns nearly half of Landa through Altana Netherlands and Skion Digital Printing. Despite the money invested, the company has been making a loss before factoring in marketing, R&D, or overhead.
CTech also recently reported that much of Landa’s creditors supported the company’s arrangement bar a select few including real estate company, Vitania, to which Landa reportedly owes millions for a specially constructed building the company was set to occupy.
A recent ten-hour meeting about the proposed purchase apparently “grew contentious” after some creditors opposed last-minute changes to plans. Quoted in CTech’s coverage, Gillon Beck acknowledged the deal was “very complex” and that the company had lost a lot of money in recent years. Beck disclosed that Landa had lost about $150m (£110.9m) annually resulting in large damage of $1.8bn (£1.3bn) to shareholders, lenders, and creditors.
Speaking about FIMI’s recovery plan, Beck said: “According to our plan, it will take about three years to reset the company. It would be a mistake not to approve the proposal. There is an opportunity here for hundreds of families to continue, for the company to remain in Israel, and for patents and technologies that may yet succeed.
“Replacing critical suppliers in a turnaround like this will not succeed. The company has no production equipment and is dependent on these suppliers.” Landa and FIMI will now aim to restructure the company to continue operations and avoid liquidation.
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