Israeli Grocer Alon Back From Brink After Creditors Deal
Alon Blue Square Israel, operator of the troubled Mega supermarket chain, averted a financial collapse by securing a deal with its creditors. The company’s stock rose the most on record while its competitors slipped.
Alon Blue reached a debt settlement with creditors to delay bond payments for five years, enabling it to sell assets to meet obligations toward its supermarkets and honour commitments to suppliers, the company said in a statement. Mega had lost market share in a price war sparked by the rise of discount operators. Alon Blue sold branches to competitors and increased its share capital in an effort to improve its ability to repay bondholders and avoid default.
“The survival of the Mega retail food chain keeps a competitor in the market and puts off a fire sale of sought- after stores,” Saar Golan, a trader at Bank of Jerusalem in Tel Aviv, said by text. “Incumbent retail chains like Rami Levy, Shufersal, and Victory had gained on hopes of a major competitor being taken out and possibly buying Mega locations on the cheap.”
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