Telecommunications equipment company ECI Telecom (Nasdaq: ECIL) has announced that its board has approved the distribution of all of its 2,890,325 shares in ECtel (Nasdaq: ECTX) to its shareholders.
The record date for the distribution is June 29, 2006, and the distribution will take place on or about July 11, 2006. .
The shares in question constitute approximately 15.9% of ECtel's outstanding shares. The distribution ratio will be approximately 0.02468 ECtel shares for each share of ECI, subject to Israeli withholding tax at the rate of 20%.
ECI president and CEO Rafi Maor said, "While sharing a common history, since ECtel spun out of ECI in 1999, ECI and ECtel have grown into two separate companies, each pursuing its own strategic agenda in different markets.
"In May 2004 we distributed the majority of our then 59% holding, retaining 16% as an indication of our continued support for ECtel. We believe that, under Eitan Naor's leadership, ECtel has now completed an outstanding turnaround program and is poised for further growth. At this time, we believe that distributing our shares in ECtel to our shareholders is in the best interest of ECI and will enhance ECI shareholder value. We also believe that this is in ECtel's interest and we wish their management all the best in pursuing their business objectives."
Published by Globes [online], Israel business news - www.globes.co.il - on June 20, 2006
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