THESGALA: Enters a new cycle of consolidation with the participation of a strategic investor

By George Lampiris

In 2011 a group of producers based in the greater region of Thessaly created the cooperative of cow breeders of the region. As a matter of fact, this alone could not mean anything more and nothing less than the establishment of a new cooperative body, with reference to the primary sector. However, a little later the project began to present something innovative for the Greek market. Gradually, in various parts of cities in Greece, the Cooperative began to install milk vending machines, which were refueled during the day. From there the individual consumer could buy his milk in a liter package supplied by the vending machine. The project was widely recognized, as each of us felt that we could buy fresh milk and put it in our fridge, shortly after milking.

In fact, the promotion of this effort by the media was such that it contributed to the rapid recognition of the brand THESGala nationwide, but also to the increase of mobility at points of sale. This was followed by neighborhood shops, which came to support the sale of milk with additional dairy products such as cheese, cream, yogurt and traditional pies, jams, cold cuts, pasta and other products of Greek producers.

Wrong handling and high operating costs

The manipulations that took place but also the rapid spread of the project in combination with the fact that the investment costs for the sellers and the wider equipment were particularly high in combination with the operating costs, resulted in the opening of the cooperative to bank lending and liabilities, with result to make a first attempt to submit a consolidation plan, which was approved in 2020 by decision 5/2020 by the Multi-Member Court of First Instance of Larissa.

The total amount of debts of the cooperative was of the order of 20 million euros in total with liabilities to banks, insurance funds, producers, with the plan to extend the repayment period of loans and at the same time cut about 20% of total liabilities to other suppliers and milk producers who supplied the cooperative. Of the total debts, 8 million euros were liabilities to banks and 6 million euros to producers. At the same time part of the obligations has been repaid by the partners. Sources familiar with the matter, however, tell Capital that on the one hand the advent of the pandemic affected consumption at THESGalas outlets, combined with inflation and the pressures that followed on feed and raw materials, events that did not initially fulfill its terms. court-approved reorganization plan.

In the plan the entry of a strategic investor

At the moment, the same sources report that a second consolidation plan is in progress, where the business plan that has been submitted envisages the entry of a strategic investor, who will acquire a percentage of participation in the Cooperative while at the same time the current shareholders will maintain participation. It should be noted that at the moment 30 livestock units participate in the THESGala cooperative.

A few hours ago, the last points of automatic milk sale were closed, the three remaining in the area of ​​Larissa, where the cooperative is based. The specific move is aimed at abolishing the process of selling milk through vending machines for cost savings, while another 57 vendors had already shut down on a nationwide basis.

The result of the new consolidation process and the decision of the court in combination with the participation of a strategic investor as foreseen by the new business plan are expected to occur in 2022. Sources close to the cooperative, however, claim that personal assets of its members have been pledged. , in order to finance the effort made so far and therefore the outcome of the consolidation process will be crucial for the next day of Thesgala, as the consolidation will ensure in addition to the viability of the producers and the viability of the is productively based on its members.