Co-op Accepts Bail-Out Plan
The debt-laden Co-op supermarket chain has accepted a rescue package from Saudi Arabian conglomerate Al-Muhaidib Group. The contract will give Al-Muhaidib, owner of Saudi Arabia’s Giant Stores, the 15-year licensing and management agreement that it lobbied for during their negotiations.
The Saudi firm will take over the management, marketing, sales and finances.
Moreover, the firm will hand over 6 percent of revenues to the Co-op for the life of the contract, which in itself will cover administrative costs, bank loans, property debts, debts to suppliers and shareholders’ interest.
On the other hand, the Giant Stores will keep the remaining 94 percent of revenues. Based on last year’s $150 million turnover, the Saudis will make the first payment of $9 million once the contract is signed, with expectation that revenues will mount to $300 million annually under the current management. — ( Banque du Liban et d'Outre-Mer Sal )
© 2000 Mena Report (www.menareport.com)