Lusix faces September deadline to secure buyer amid $65 million losses
Lusix faces September deadline to secure buyer amid $65 million losses
Trustee to explore full or partial sale of Lusix as financial woes deepen.
The Central District Court has approved the extension of the stay of proceedings for Lusix, a lab-grown diamond company, until the end of the month. The court also appointed attorney Shay Bar Nir as the trustee for the company's debt settlement. Lusix was founded by Benny Landa.
Bar Nir, from the Firon law firm, will seek to find a buyer for the company, either in parts or in full, after stating in the request for an extension that the merger talks with another company, as reported by Lusix to the court, are impractical. The Commissioner of Insolvency Proceedings and the company's creditor banks supported the request.
In addition to Landa, the company's shareholders include More Investment House, Ragnar, and businessmen Aharon Frenkel and Dudi Weissman. The company has lost $65 million over the last two and a half years.
In the coming days, Bar Nir will publish invitations for bids to purchase the company and will simultaneously announce a deadline for submitting debt claims against the company, to be filed within 14 days.
While the company registered a $551,000 profit in 2021, it reported a loss of $22.8 million in 2022, $30.7 million in 2023, and $11.5 million in the first half of 2024. In total, Lusix has lost a staggering $65 million since the beginning of 2022. These losses are primarily due to the aggressive entry of Indian competitors into the laboratory diamond market, which has driven down the price of lab-grown rough diamonds by 90%.
The company currently operates 76 machines at its factory in Rehovot and has placed two-thirds of its 90 employees on unpaid leave. Lusix submitted its request for a stay of proceedings due to debts amounting to NIS 103 million. The company’s revenue has steadily declined: from $22.8 million in 2021, to $17 million in 2022, to $14 million in 2023, and to just $6 million in the first half of 2024.
