Mega will convene an assembly of its creditors today for the purpose of approving the debt arrangement it is proposing to them. Parent company Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI) published Mega's results for the first quarter.
Mega's revenue totaled NIS 1.389 billion in the first quarter, down 2.5%, compared with NIS 1.42 billion in the corresponding quarter last year. Same store sales grew 3.2%, compared with the first quarter of 2014.
First quarter gross profit amounted to NIS 344 million, 25% of revenue, compared with NIS 375 million in the corresponding quarter last year, 26.3% of revenue.
Mega's first quarter operating loss was NIS 67 million, compared with a NIS 52 million loss in the first quarter of 2014.
Loss from operations before financing totaled NIS 80 million in the first quarter, compared with NIS 66 million in the corresponding quarter last year.
In its bottom line, Mega reported an NIS 87 million net loss in the first quarter, compared with a NIS 50 million net loss in the corresponding quarter last year.
Alon Holdings Blue Square said, "Company management has formulated a plan, which the board of directors has approved. It includes, among other things, streamlining measures and layoffs, a cut in advertising spending and other spending not essential to the company's regular operations, an inventory cut, reducing investments to the minimum needed for proper operation of the equipment and facilities, and the sale of branches."
In addition to these actions, the parent company has undertaken to provide additional financing to Mega of no more than NIS 240 million in order to help the company finance temporary liquidity problems, or in the event of problems in selling branches.
Alon Holdings Blue Square added, "The company has already begun implementation of some of these measures, and plans to carry out the rest of the plan with no delay. Management plans to constantly monitor progress in carrying out the plan in order to make sure that the measures being taken are sufficient. Company management believes that urgent implementation on the shortest possible timetables of these measures will put the company back on a stable business path."
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2015
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