Dead Sea Cosmetics Firm Seeks Debt Arrangement Amid Financial Woes

Israeli cosmetics company "Paloma Dead Sea," specializing in products derived from Dead Sea minerals and salts, has filed a request with the Haifa District Court for a debt settlement. The company, founded in 1999 and owned by brothers Eli and Ran Segev, faces cash flow difficulties with total debts amounting to approximately 26 million shekels, including 16 million shekels owed to external creditors and 10 million shekels in owner loans.

Paloma Dead Sea attributes its financial crisis to a combination of factors, including the COVID-19 pandemic, the recent conflict (referred to as "Swords of Iron War"), a decline in tourism and exports, a sharp drop in the dollar's exchange rate, and U.S. tariffs on Israeli goods. The company proposes a 60-month repayment plan totaling about 4.9 million shekels, funded by asset sales, such as property in Caesarea and an apartment in Netanya, along with monthly contributions of 20,000 shekels from operational cash flow.

The company's shareholders have reportedly injected 10 million shekels over the years as owner loans and have foregone salaries. Paloma Dead Sea is seeking the appointment of a settlement trustee to preserve its operations rather than face liquidation. The company asserts that its external production partners are independent and unaffected by its financial situation.

Advocate Erez Burg, representing the company, stated that around 80% of its sales are exports and that the company was profitable and stable for years. He emphasized that the goal of the proceedings is to rehabilitate the remaining business, maintain jobs, and provide a higher return to creditors than liquidation would offer. The company continues to operate and communicate with its creditors. The Haifa District Court has granted a temporary stay of proceedings and scheduled a hearing for October 7.