Luxury Car Dealer Seeks Protection from Creditors Amidst 97 Million Shekel Debt

Buy And Drive Holdings, a prominent Israeli luxury car dealership operating since 1997, has filed an urgent request with the Central District Court for a stay of proceedings and approval to convene creditor assemblies to arrange a debt settlement. The company, which has faced significant financial difficulties, owes approximately 97 million shekels.

In 2022, Buy And Drive's revenue exceeded 600 million shekels, with a fleet of around 1,100 leased and rented vehicles. However, the company, co-owned by Uri Dgami and Yitzhak Maya, experienced severe challenges starting in late 2022 and throughout 2023. These included sharp interest rate hikes, increased financing costs, new competition, the rise of electric vehicles, and the economic impact of the "Swords of Iron" war.

In response, the company initiated a restructuring plan a year ago, involving reduced leasing operations, staff layoffs, and efforts to repay bank debts. A key element of this plan is the sale of its 51 million shekel (plus VAT) property in Netanya to Miyara Finance, a deal expected to cover secured debts and leave an estimated 10 million shekel surplus for other creditors.

However, recent tax authority liens on the company's accounts and a 5 million shekel escrow deposit for the property sale threaten to derail the restructuring. The company is seeking a court order to delay proceedings, approve an operational plan, and appoint Adv. Hovav Biton as a settlement manager to facilitate its survival as a going concern rather than liquidation.

The company's debts include roughly 10.9 million shekels to authorities, 1.4 million shekels to employees (excluding current wages), 40 million shekels for non-bank financing on the property, 15 million shekels to suppliers like Chamobil, Carasso, and S.R. Accord, secured by about 98 vehicles, 12.6 million shekels in debts secured by personal guarantees, and 16.5 million shekels in general unsecured debts.