Israeli Luxury Car Importer Seeks Protection from Creditors Amidst NIS 100 Million Debt

Israeli luxury car and leasing agency, Buy and Drive, has filed an urgent request with the Central District Court for a stay of proceedings and a debt arrangement, citing debts totaling approximately NIS 97 million. The company seeks to continue its business operations and avoid liquidation.

Founded in 1997 and co-owned by Uri Degami and Yitzhak Maya, Buy and Drive has faced significant pressures recently. The company attributes its crisis to a sharp rise in interest rates and financing costs since late 2022, changes in the automotive industry including increased competition and the rise of electric vehicles, and the economic impact of the "Swords of Iron" war. In 2022, the company's sales turnover exceeded NIS 600 million. At its peak, Buy and Drive operated a fleet of about 1,100 vehicles for leasing and rental, and owned a showroom and operational center in Netanya.

Over the past year, the company attempted to manage its difficulties through self-initiated efficiency measures, including reducing leasing operations, layoffs, and asset sales. These steps reportedly allowed the company to fully repay its debts to the banking system. A key component of the current recovery plan involves selling the company's Netanya property for NIS 51 million plus VAT. This sale is expected to cover secured debts and leave an excess of about NIS 10 million for other creditors.

Earlier reports indicated the Netanya showroom was sold for approximately NIS 51 million, with a concurrent sale of about 15% of its leasing operations for around NIS 15 million. Of the total debt, approximately NIS 40 million is owed to non-bank lenders against the Netanya property. Another NIS 16.5 million are classified as general debts, while debts to suppliers and importers like Kelmoobil, Crasco, and S.R. Accord amount to about NIS 15 million, secured by a lien on 98 vehicles. Additionally, the company owes NIS 12.6 million in personal guarantees, NIS 10.9 million to tax authorities for VAT, and NIS 1.4 million to employees for unpaid wages.

The urgent court filing followed recent tax authority liens placed on the company's accounts and a NIS 5 million deposit held in trust for the real estate transaction. The company argues these liens jeopardize the deal's completion and its ability to continue operating. Buy and Drive is therefore requesting a stay of proceedings, approval of an operational plan, and the appointment of an arrangement manager, with Adv. Hovav Biton proposed for the role. The goal is to enable continued operation during the arrangement period, finalize the property sale, and formulate a plan to repay creditors while avoiding business collapse.