An Israeli court approves the sale of Landa Digital Printing to FIMI, one of Israel’s leading private equity firms, for NIS80 million (approx. $33 million). FIMI will own 100 per cent of Landa and continue to employ most of its workforce, said a CTech by Calcalist report.
In her ruling, as quoted by CTech, Judge Hana Kitsis noted that the arrangement “ensures the company’s continued operations and safeguards the employment of most of its employees.”
She emphasized that liquidation would likely yield only minimal proceeds, given that the company’s customers are primarily overseas and its only assets in Israel are machinery. Landa, which never broke even since its inception, filed for court protection in July due to a cash flow crisis after two of its main investors halted funding. At that time, it had a debt of approx. NIS1.75 billion ($710 million).
FIMI has previously disclosed that Landa lost about NIS500 million (approx. $208 million) annually, roughly NIS40 million each month (approx. $17 million), resulting in a cumulative damage of about NIS6 billion (approx. $2.5 billion) to shareholders , lenders, and creditors.
The court granted it a two-month reprieve until the end of August to come up with a restructuring plan that would satisfy all creditors. FIMI believes Landa can become financially viable although it may take three years.
According to Israeli business news website Globes, FIMI’s acquisition of Landa for NIS80 million makes this is one of the biggest ever value write-downs in Israel, representing a loss of value or an accumulated loss of $1.3 billion for investors and the company.
News Courtesy : Printaction