Mystery investors propose new plan for Elemis
But the identity of the investors has been kept secret, causing a rival developer who has also bid for the company to call the deal a possible sham. "Either they're hiding something, or this whole deal is one big lie," said David Mitzner, owner of Rida Development, which has been looking to buy Elemis for nearly a year so it can build a warehouse and distribution facility on the site.
Elemis President Monika Koszade announced the deal with the Australian developers at a creditors' meeting last week. She presented the deal as an alternative to Rida's plan for the defunct factory.
"We've found a buyer, and we're satisfied this will keep the Elemis name alive," said Koszade, who would not give the names of the two investors, except to say they were represented by real estate agency Healey & Baker and were of Australian origin.
"It's a bit ridiculous to expect (the creditors) to accept a sale proposal when they don't even know the names of the buyers," countered Mitzner.
Koszade said the two unidentified investors offered zl. 21 million ($6 million) for 11 hectares and nine buildings owned by Elemis along ulica Matuszewska, in Warsaw's Praga Polnoc district. The money will be used to pay back about 64% of the zl. 33 million ($9.4 million) that Elemis, which went bankrupt in January 1997, owes to 2,200 former employees, suppliers and government organizations.
Like Rida, the unnamed Australians have proposed building a warehouse and distribution center on the site. But the deal can't go ahead until a super-majority, 67%, of Elemis's creditors agree to the plan, according to rules imposed by the bankruptcy court. In a vote held last week in a packed conference hall, just 64.5% of creditors agreed to the proposal offered by Koszade. Elemis must achieve a super-majority by April 1, or the company will be put up for public tender.
"There will be two weeks of very intensive lobbying. The goal will be to convince enough creditors that this deal actually makes sense and the company will continue production," said Richard Peterson, managing director and a partner of Healey & Baker, who also refused to name the two Australian investors.
If the deal with the Australians is not approved, and Elemis is put up for public tender, the company will probably land in the hands of Rida Development, Koszade said. Last month Rida offered to buy the company for zl. 37.3 million ($10.66 million) at a public tender that was called off at the last second by the bankruptcy judge (See WBJ, March 9-15, 1998).
Koszade said that Mitzner is "actively lobbying" Elemis creditors to reject her proposal. "Either we convince our creditors or this company will be lost to a real estate developer," Koszade said.
Late last year, Elemis hired real estate agency Unikat to value the 18 buildings and 22 hectares of land owned by the company in the Praga Polnoc district. Unikat's agents toured the site and concluded the entire property holding was worth zl. 26 million ($7.43 million), said Grzegorz Penar, director of Unikat's industrial real estate department.
Mitzner insisted that his proposal is the most attractive. He said his offer would be enough to pay creditors and refurbish some of Elemis' buildings. And Mitzner has invited a Turkish television producer, Telestar, to produce television sets in one of the buildings using 100 former Elemis employees.
By comparison, the zl. 21 million ($6 million) offered by the Australians would only cover a portion of the money owed to creditors and carried no guarantee that production would continue on the site, Mitzner said.
"My proposal would satisfy the creditors and would keep production going on the site," he said. "What more could they want?"
Elemis President Monika Koszade announced the deal with the Australian developers at a creditors' meeting last week. She presented the deal as an alternative to Rida's plan for the defunct factory.
"We've found a buyer, and we're satisfied this will keep the Elemis name alive," said Koszade, who would not give the names of the two investors, except to say they were represented by real estate agency Healey & Baker and were of Australian origin.
"It's a bit ridiculous to expect (the creditors) to accept a sale proposal when they don't even know the names of the buyers," countered Mitzner.
Koszade said the two unidentified investors offered zl. 21 million ($6 million) for 11 hectares and nine buildings owned by Elemis along ulica Matuszewska, in Warsaw's Praga Polnoc district. The money will be used to pay back about 64% of the zl. 33 million ($9.4 million) that Elemis, which went bankrupt in January 1997, owes to 2,200 former employees, suppliers and government organizations.
Like Rida, the unnamed Australians have proposed building a warehouse and distribution center on the site. But the deal can't go ahead until a super-majority, 67%, of Elemis's creditors agree to the plan, according to rules imposed by the bankruptcy court. In a vote held last week in a packed conference hall, just 64.5% of creditors agreed to the proposal offered by Koszade. Elemis must achieve a super-majority by April 1, or the company will be put up for public tender.
"There will be two weeks of very intensive lobbying. The goal will be to convince enough creditors that this deal actually makes sense and the company will continue production," said Richard Peterson, managing director and a partner of Healey & Baker, who also refused to name the two Australian investors.
If the deal with the Australians is not approved, and Elemis is put up for public tender, the company will probably land in the hands of Rida Development, Koszade said. Last month Rida offered to buy the company for zl. 37.3 million ($10.66 million) at a public tender that was called off at the last second by the bankruptcy judge (See WBJ, March 9-15, 1998).
Koszade said that Mitzner is "actively lobbying" Elemis creditors to reject her proposal. "Either we convince our creditors or this company will be lost to a real estate developer," Koszade said.
Late last year, Elemis hired real estate agency Unikat to value the 18 buildings and 22 hectares of land owned by the company in the Praga Polnoc district. Unikat's agents toured the site and concluded the entire property holding was worth zl. 26 million ($7.43 million), said Grzegorz Penar, director of Unikat's industrial real estate department.
Mitzner insisted that his proposal is the most attractive. He said his offer would be enough to pay creditors and refurbish some of Elemis' buildings. And Mitzner has invited a Turkish television producer, Telestar, to produce television sets in one of the buildings using 100 former Elemis employees.
By comparison, the zl. 21 million ($6 million) offered by the Australians would only cover a portion of the money owed to creditors and carried no guarantee that production would continue on the site, Mitzner said.
"My proposal would satisfy the creditors and would keep production going on the site," he said. "What more could they want?"
