11 July 2001


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Intense negotiations with foreign investors and Andrews Feeds at Price Club

The Price Club chain of supermarkets is undergoing intense negotiations with foreign investors and local company Andrew's Feeds over a possible sell out of the chain.

The sell out will either be complete or else in the form of shareholding.

Following the problems which have hit the sector lately, foreign investors are very much interested in acquiring the Maltese owned supermarket chain.

New interest from Andrew's Feeds (Malta) Limited in buying the chain has made the sell-out negotiations more difficult for the Price Club operators.

Although discussions are intense the Price Club Directors want to reach a speedy agreement. All the Price Club outlets are practically empty and many loyal customers are opting for other supermarkets. Companies are not selling products to Price Club unless the supermarket chain pays at once.

If Price Club sells to Andrew's Feeds their biggest credit problem will be solved as Albert Mizzi, who is the Director of Andrew's Feeds is also a Director of Alf Mizzi & Sons, the biggest creditors of Price Club.

Albert Mizzi might try to convince other creditors not to take legal action against Price Club hoping that the new capital and a general restructuring would enable the chain to get back on its feet.

Recently the present Price Club directors pumped fresh capital into the chain but it was not enough and more capital is required from foreign or local investors.

Mr Victor Zammit, a Price Club director told The Malta Business and Financial Times that investors from Italy, Ireland and South Africa have been discussing the possibility of buying into the chain.

He also confirmed Andrew's Feeds interest in buying the chain.

Insiders also said that both the foreigners and Andrew's Feeds are more prepared to buy the main markets in Swatar and Burmarrad.

Meanwhile an anonymous letter circulated to the press entitled 'The Bankruptcy of Price Club', stated that many who are still owed money by the Price Club are undergoing a bad patch. It alleged that those who are not 'big' are not getting enough information about what will happen in the future.

It also stated that in the last meeting, the 'big boys', referring to Alf Mizzi, Coca-Cola, Bandallu, Farsons and Bonnici have got personal interest not to take any action at all. The letter asked a number of questions pertaining to the interest shown by Andrew's Feeds in the whole matter. It also outlined what it alleged were Albert Mizzi's conflicts of interest in the whole matter.

The anonymous letter also criticised the Nationalist Party media for not mentioning anything about the Price Club saga.

The Price Club scenario is similar to many other businesses. The main concern is that the number of retail outlets that have mushroomed have eaten away the competitive edge of many companies. Others, facing credit problems with their banks have resorted to mass bartering and this has attenuated the cash flow problem facing the country at present.

The Prime Minister Eddie Fenech Adami, Vice-Prime Minister and Lawrence Gonzi together with Finance Minister John Dalli had met the Price Club Directors and the Creditors to find a solution to the problem. Price Club's demise may create economic difficulties on a wide scale. The Government has recently pleaded with creditors to give Price Club more time.

Meanwhile GRTU Secretary General Vince Farrugia and Labour Party spokesperson Leo Brincat told The Malta Business and Financial Times that they do not agree with government's intervention in the matter. They both believe that the issue concerns the creditors and it should be resolved by way of the market.

 

 



The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt