There is growing concern surrounding the future of Israel’s Shamir Food Industries, the maker of Shamir salads, after the Israeli Securities Authority questioned the company’s financial standing.
Shamir Food Industries is traded on the Tel Aviv Stock Exchange. A report in Globes notes that Shamir Food Industries’ shareholders are seeking financing to stay in business, but if it cannot meet its debts it will become insolvent. During the past few months, the shareholders have failed to find investors willing to inject necessary capital into the company.
In view of recent developments, and creditors’ demands that Shamir Food Industries reduce the debts to them, the company is worried that it will not be able to survive.
The company suffered lower-than-expected sales in December, and is owed NIS1.1m (US$239.000) by Clubmarket Marketing Chains, which added to its operating difficulties. At the end of the 3rd quarter of 2005, Shamir Food Industries owed NIS13m in outstanding loans from various banks and NIS18m to suppliers and service vendors.
Shamir Food Industries has a negative shareholders’ equity of NIS8.4m. Its negative cash flow from current operations since January totals NIS5m. The company lost NIS11m, and had NIS 46m in revenue between January and September 2005, compared with a loss of NIS3m and approximately the same revenue in the corresponding period in 2004.