Private equity firm FIMI Opportunity Funds has been given the go-ahead to acquire Benny Landa’s digital printing company, Landa Corporation, and invest $80 million into its operations, according to reports by Israeli technology news site Ctech by Calcalist.
The report stated that The Central District Court recently approved a debt restructuring plan for Landa Corporation for FIMI to acquire the company and continue under new ownership.
The report identified that following the acquisition, FIMI will own 100 per cent of Landa Corporation and will continue to employ most of its workforce.
Ctech by Calcalist stated, “In her ruling, Judge Hana Kitsis noted that the arrangement “ensures the company’s continued operations and safeguards the employment of most of its employees.” She emphasised 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.
“Approval of the debt arrangement will allow many employees to retain their jobs and source of income while preserving their full rights. On the surface, it appears that any gains from a liquidation alternative would be minimal.,” the judge said.
It is expected that up to $22 million of the $80 million that FIMI will inject into the company will be used to pay off some of the debts, as well as to partially finance the expenses of the arrangement process.
The move comes after the company filed for court protection in July, amid a “cash flow crisis”. It was said that the company has debts of NIS 1.75 billion (approximately A$790 million), with about NIS 1.4 billion (approximately A$632 million) owed to investors holding secured creditor status.
The development came just weeks after local media reported that the company was also planning to lay off more than 100 employees – more than 20 per cent of its workforce.
In a statement issued to media at that time, Landa Digital Printing said, “Despite the company’s significant achievements, the time it has taken to reach the full realisation of its business potential is longer than expected.
“The geopolitical situation, as a result of the long war in Israel and regional instability, as well as commercial reasons, have made it difficult for the company, and the shareholders who have financed the company throughout its years and they recently informed the company’s management that they intend to stop financing the company immediately.
“As a result, the company has found itself in a cash flow crisis. In response, the company has carried out a reorganisation process in recent weeks, as part of which significant cuts were also made to deal with the situation and enable the continued realisation of its potential.
“The company’s employees and customers have been updated on the situation and will continue to be updated as relevant developments occur, out of understanding the complex situation in which they find themselves and out of deep appreciation for their work and their full commitment to the company.”
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