The cash-strapped cable TV company Golden Channels is delaying payments to suppliers, TheMarker has learned, although the company denies it. So does its supplier, C. Mer Industries (TASE: CMER) .

One of its biggest suppliers is TMCS, a member of the C. Mer group. TMCS recently received notification that delayed payments will be even later, TheMarker has learned.

"Golden Channels pays its debts to C. Mer on time," commented C. Mer's CEO, Chaim Mer. He added that the banks recently bought commitments from Golden Channels, indicating their faith in the cable company. He declined to comment on the amounts involved, but specified that TMCS - and another C. Mer group company, Rotel - receive their payments on time, and that any money owed to them is negligible.

Golden Channels and another vendor, Thompson, have discussed rescheduling the debt, which is for 240,000 digital converters. The cable TV company also owes TMCS $100,000 for equipment and lab services.

Over the last year C. Mer took a strategic decision to reduce its exposure to Golden Channels, and not to sell it any more converters.

Israel's other two cable TV companies, Matav Cable Systems (Nasdaq:MATV) and Tevel, also owe C. Mer substantial amounts of money.

Over the last half year Golden Channels has adopted a method of contacting suppliers shortly before payments are due, and asking them to change the exchange rate of the dollar, or reschedule payment, TheMarker has learned.

Industry sources say the company is strapped for cash, which is why it has deferred upgrading its network for two years now. Meanwhile, Matav and Tevel have finished upgrading their systems.

All three must complete the upgrades before the Antitrust Authority will allow them to merge. As it took Matav and Tevel about a year, a merger is probably not in the cards at the target date of year-end 2002.

Although its precise debt structure is not known, Golden Channels' debt is estimated at $900 per subscriber.

Company chief executive Ran Belinkov denied that Golden Channels is holding up payments to suppliers.

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