The Mega saga is coming to a sad end. The supermarket chain controlled by Alon Blue Square Israel (BSI) announced today that it would petition the court for a stay of proceedings against it and for the appointment of a trustee for the company. The fate of the chain's 3,500 employees is now in the balance.
On Thursday, "Globes" revealed that Mega had approached all the suppliers that were due to receive a payment totaling NIS 50 million on Friday, and had asked them for a week's grace, during which it hoped to reach a further debt arrangement that would facilitate the sale of the chain. After the original arrangment, Mega was left with debts totaling NIS 462.8 million.
Mega, however, failed to obtain the suppliers' agreement.
The Alon Blue Square board of directors said in a statement, "In the petition to the court to be filed within the coming hours, Mega will ask for the appointment of an official on behalf of the court and that the chain's stores should be allowed to continue operating using the company's existing cash and stock until a worthy buyer is found by means of which the chain will continue to operate together with its dedicated workers and will continue to be a competitive player in the retail market."
In the past few days it did look as though there was room for optimism over Mega, since Alon Blue Square received two offers to buy Blue Square Real Estate, Mega's sister company, at a valuation of NIS 1.65-1.7 billion, which would enable Alon Blue Square to inject cash into Mega.
Published by Globes [online], Israel business news - www.globes-online.com - on January 17, 2016
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