IEC fiber-optic project moves ahead

The formal procedures are due to be completed by mid-June.

Israel Electric Corporation (IEC) (TASE: ELEC.B22) representatives will hold talks in the coming days with a group of investors headed by ViaEuropa AB and Cisco Systems Inc. (Nasdaq: CSCO) to finalize details of their collaboration on the fiber-optic venture. When an agreement is reached, IEC will send it to its board of directors for approval, after which the government's selection committee will declare ViaEuropa the winner in the tender, and the venture will get underway. The venture will reportedly connect it first customers within 18 months.

Within six weeks, the fiber-optic venture is due to be finalized, depending on the presentation of financing documents and the deposit of guarantees by the only bidder in the tender, ViaEuropa Israel Ltd., a consortium of ViaEuropa and Israeli companies.

Under the timetable, by mid-June, IEC's board of directors will approve the agreements and contract with ViaEuropa Israel, after which the partners are due to inject capital into the venture and establish a joint company and obtain a license.

In the past few weeks, there has been real progress in the review of partners' business plans by the selection committee and IEC. IEC amended part of the business plans and made comments. In general, it can be said that the venture is moving forward, and, by mid-June, will complete its most important stage - the deposit of the money and guarantees - which will make it possible for the venture to begin organizing and working.

Until it is completely clear that the venture has obtained all the necessary permits, ViaEuropa will not appoint a CEO for the business. Even now, six weeks before the completion of the procedures, no CEO has been appointed. The CEO is due to be appointed in coordination with IEC, but its approval is not required. Nonetheless, it is unlikely that a person unacceptable to IEC will get the job.

As part of the venture, the new company will deploy a nationwide fiber-optic network to private customers. The project will take several years, but the venture has obtained regulatory relaxations which will make it financially worthwhile.

Published by Globes [online], Israel business news - www.globes-online.com - on May 1, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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