A U.S. court hearing is scheduled for Monday over emergency financing for Simed, the summer camp company run by the Shabsales brothers. Simed raised NIS 620 million in bonds on the Tel Aviv Stock Exchange last winter, then collapsed last month after it was alleged that the owners had withdrawn tens of millions of dollars from its accounts to cover personal debts and also tried to pledge its credit card operations.
Bondholders are now trying to provide the company with a debtor-in-possession, or DIP, loan of $20 million, while Klirmark Fund would add about $60 million, for a total short-term facility of about $80 million. Market estimates suggest the loan will carry a low double-digit interest rate and last only a few months, with the aim of saving Simed’s summer camp operations.
The company’s creditors will vote on the new financing and will soon decide whether to operate the 16 pledged camps or all 30 camps, in order to preserve the business as a going concern. Simed’s chief restructuring officer, Assaf Ravid, told creditors last week that emergency funding is needed to keep the summer season alive and run the youth camps on the U.S. East Coast.
Ravid said the money must be in place by Friday, June 26, an unusually tight timetable by U.S. insolvency standards. Under the proposed DIP package, the full facility is $220 million, including the $80 million cash injection and a $160 million roll-up of bondholder debt, allocated pro rata to Tel Aviv bondholders. Klirmark, a fund specializing in distressed companies, was founded by Raz Kafri, Ilan Lebanon, Yaniv Tzlal, Chai Natubitch, Dganit Paran-Wiesel and Itzik Ohayon, and its chief investment officer is Tzlal.
