Two Israeli Food Companies Seek Protection from Creditors Amidst 30 Million Shekel Debt

Two veteran Israeli agricultural companies, "Malei HaSal - Vegetable Marketing" and "Malei HaSal - Fruits and Vegetables," have filed for court protection from creditors in the Beersheba District Court, citing debts totaling approximately 30 million shekels. The companies, established by farmer Ziyon Swisa and operating integrated growing areas in Kibbutz Chatzor, Be'erot Yitzhak, and Petza'el, are seeking a stay of proceedings and the appointment of a receiver.

According to the filings reported by ynet, "Malei HaSal - Vegetable Marketing" owes around 13 million shekels, while "Malei HaSal - Fruits and Vegetables" has debts estimated at 17 million shekels. The companies attribute their financial crisis to a combination of factors including the COVID-19 pandemic, the Swords of Iron War, security escalations with Iran, international boycotts, and a severe shortage of labor.

The companies claim that the departure of foreign workers and the inability to hire agricultural laborers from the Palestinian Authority led to the shutdown of growing areas and greenhouses, resulting in crop spoilage. Furthermore, they cite a significant increase in operational costs, with prices for raw materials, fuel, packaging, and transportation rising by tens of percent.

These companies supply produce to major supermarket chains such as Rami Levy, Shufersal, Yohananof, and Fresh Market, as well as other domestic clients. Alongside the request for a stay of proceedings, the companies have presented a potential lifeline: an agreement in principle with an external investor to inject 2.5 million shekels in exchange for a 50% stake in both companies.

Additionally, a personal stay of proceedings has been requested for Ziyon Swisa, with his legal team arguing it is essential for the continued operation of the companies and to facilitate negotiations with creditors.