Koor Industries (NYSE: KOR; TASE: KOR) announced today that it has completed the final stage of the defense transaction agreement, (signed December 27, 2004 and amended July 6, 2005), among Koor, Elbit Systems (Nasdaq: ESLT; TASE: ESLT), and Federmann Enterprises for $128.1 million in cash.
As part of the last stage, Koor sold its entire 70% holding in the Elisra Defense Group for $68.8 million, and the balance of its 13% holding in Tadiran Communications (TASE: TDCM) for $59.3 million, to Elbit.
As a result of the final stage of the transaction Koor will record, in the fourth quarter of 2005, a capital gain of approximately $29 million which is comprised of $22 million on the sale of Elisra, and approximately $7 million on the sale of the Tadiran shares. The exact capital gains will be determined when Koor compiles its financial statements for the fourth quarter of 2005.
Koor currently holds 7.7% of Elbit and 70% of Dekolink, a start-up in the cellular area which Koor received, as part of the agreement, as dividend in kind from Elisra in the third quarter of 2005. As previously announced, Koor will also receive, as part of the agreement, additional consideration following receipt of future insurance proceeds.
Following the transaction Koor reduced its corporate net debt by $128.1 million; net debt now totals approx. $200 million ($110 million net bank debt and $90 million debentures).
Koor Industries CEO Jonathan Kolber said, "Koor, together with our partners, Federmann Enterprises and Elbit Systems, are pleased to have been the driving force in creating Israel's largest private sector defense company by combining the Elisra Defense Group and Tadiran Communications under the auspice of Elbit Systems."
Published by Globes [online], Israel business news - www.globes.co.il - on Wednesday, November 30, 2005