The Tehal Consulting Engineers company applied to the District Court in Tel Aviv with an urgent request for a stay of proceedings. The company asks the court to order a stay of proceedings for a period of 60 days during which it plans to formulate a debt settlement with its creditors. Tehal Mahandasim has accumulated debts amounting to over NIS 410 million, most of which (NIS 388 million) are to several of the largest banks in the economy.
The company provides engineering planning services and supervision of projects in the fields of water and its supply. The banks that are its main creditors are Bank Hapoalim, to which it owes 61.7 million dollars (210.4 million shekels), Bank Leumi to which the debt is 26.4 million dollars (90 million shekels), Bank Mizrahi Tefahot whose debt amounts to about 20 million dollars (67.8 million NIS) and his HSBC bank the company owes about 6 million dollars (NIS 20.5 million). The rest of the debts are to the company’s employees, state authorities and suppliers.
Among the reasons for the economic collapse, according to the application submitted to the High Court, Tehal describes two main events. One is “a drastic decrease in orders received from Mekorot”, and the other is the cessation of payments by the Government of Ghana for debts it has accumulated, starting last week.
“The government of Ghana has so far paid off as a series of loans that were placed in the government’s account at Bank Hapoalim a substantial amount,” notes Tehal Mehendasim to the High Court and adds that “a certain part of the current payments in this regard were a source of cash flows for the company. Although the company did not receive a concrete notification about the cessation of payments to the company, in view of the general announcement of the Government of Ghana it is clear that it is no longer possible to rely on this source with certainty as in the past.”
An initiative of David Ben Gurion and Levi Eshkol
Tehal Mahandasim was established in 1961, but its activity began even before the establishment of the state in 1942 as an initiative of David Ben-Gurion and Levi Eshkol. In the first years of the establishment of the state, the company served as the planning arm of Mekorot for planning the transportation of water throughout the young state of Israel. It later expanded to various countries in the world, including countries such as India in Asia, as well as activities in various African countries and Eastern and Central Europe. The company currently employs 290 employees, where 68 employees are employees of the engineering division and the headquarters in Israel. 98.4% of the Tehal Group, which owns Tehal Engineers, is held by a company Cardan N.V The stock exchange that trades in Tel Aviv according to a value of only NIS 1.8 million.
The company has various projects in India and Romania, and also in countries such as Russia and Ukraine, where the projects ran into difficulties due to the war that broke out between the countries. The application describes a worsening of the company’s business situation since 2019, when it had to deal with cash flow difficulties. The company also invested in projects that turned out to be loss-making, when its projects in countries such as Angola, Romania and India brought it “significant losses and an investment of many tens of millions of dollars went down the drain”. The situation of the parent company Kardan, which also ran into difficulties and could not support Thal, was also a factor in its business decline.