YAVNE, Israel, Dec. 18, 2011 /PRNewswire/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (the " Company" or " Willi-Food"), a global company specializing in the development, manufacturing, marketing and international distribution of kosher foods, today announced an agreement to sell its entire 51% ownership interest in Shamir Salads (2006) Ltd. (" Shamir Salads") for NIS 12 million to other shareholders of Shamir Salads (" Other Shareholders") as a result of settlement of a dispute with those shareholders. In addition, the Company will receive NIS 1.5 million in past due management fees as part of the settlement.
The agreement, reached on December 16, 2011, as part of arbitration proceedings between the Other Sharholders and the Company, also provides that the Company will be released from any guarantees provided to banks or other entities regarding payment of Shamir Salads promissory notes, and that representatives of the Company will resign from the Board of Directors of Shamir Salads.
As a result of the agreement, mutual claims made by parties in the arbitration proceeding will be cancelled without any order for expenses, and each party will waive its right to bring additional court proceedings or claims regarding this matter. In addition, Shamir Salads will indemnify, without limitation as to date or amount, the Company and any officers of Shamir Salads who served on behalf of the Company, for any liability or expense arising from actions taken by such officers or in matters directly or indirectly related to Shamir Salads.Completion of the transaction is subject to the agreement being granted the status of an arbitration award, and that award receiving the approval of Tel Aviv District Court. "After two-and-a-half years and no end in sight to the arbitration proceeding, we are acting to bring this prolongued dispute to a close," commented Mr. Zwi Williger, Chairman of Willi-Food. "The results we achieved as majority owners of Shamir Salads were disappointing and unlikely to improve. At the same time, the conflict and arbitration proceeding hindered the progress of our Company as a whole. We simply cannot afford to further divert management's time and attention from our core business in these challenging economic times." The sale is expected to generate profits of NIS 5.5 million (approxmatly USD 1.5 million), which will be recognized in the Company's financial reports for the fourth quarter of 2011. In an unrelated announcement, the Company also announced the departure of its chief executive officer, Kobi Levi, effective as of the end of January 2011. The departure of Mr. Levi was agreed to jointly by Mr. Levi and the Company in light of the Company's significantly lower expectations regarding net income from operations for the coming fiscal quarters compared to prior quarters and as a way to reduce administrative expenses. Commented Mr. Williger, "Together with Koby we have decided to adjust our management strategy in light of continued Israeli and global economic uncertainty. We wish Kobi much success in his future endeavors."