Gov't to continue Tower Semiconductor grant talks

The company claims it deserves $70-80 million.

At the request of Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM), the Ministry of Industry, Trade and Labor has approved reopening talks on the $70-80 million balance of company's grant application. The company claims that it deserves the grant.

An Investment Promotions Center committee has advised Minister of Industry, Trade and Labor Benjamin Ben-Eliezer to approve the grant discussion, and he signed the request. The application is now in the hands of Minister of Finance Yuval Steinitz, who will make the decision.

Tower first applied for the grant in 2000, when the government promised it $250 million in exchange for building a new fab and creating jobs in the north. The company has two fabs in Migdal Ha'Emek, which employ 1,000 people. Over the years, the company has drawn on the grant, and the current balance is $70-80 million, which it wants.

The Ministry of Industry has been disquieted by problems at Tower. The ministry initially said that it would not provide the balance of the grant over concerns about the company's future. The company had been losing money heavily for years and the global economic crisis exacerbated its condition and led to hundreds of layoffs. However, Tower's condition has improved in the past two years, and CEO Russell Ellwanger believes that it will be become profitable in the second half of 2010.

Tower's share closed at $1.32 on Nasdaq yesterday, giving a market cap of $273 million. The share price fell 5.9% by midday today on the TASE to NIS 5.19.

Published by Globes [online], Israel business news - www.globes-online.com - on July 7, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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