According to Telrad's general manager Bezalel Levin,
an issuance may result from the exercise of the
option.
Israeli telecommunications manufacturer Telrad and
its Canadian counterpart Nortel (formerly Northern
Telecom) have recently been conducting advanced
negotiations for the exercise of the option held by
Nortel to acquire 20% of Telrad by the end of 1996, at
a consideration of $45 million.
The option was issued in January 1995, under a co
operation agreement between the two companies relating
to the export of brand-name products to Nortel, the
purchase of Telrad products by Nortel, the development
of products to be supplied by Telrad to Nortel and
research and development by Telrad for Nortel.
The option held by Nortel confers upon it the right
to make the acquisition at a company value of $225
million, whereas Telrad's present value approximates
$700 million.
In 1995, Telrad sold Nortel equipment in a volume of
NIS 400 million out of its NIS 1.25 million total
sales. A considerable portion of the NIS 98.6 profits
of the last quarter derived from sales to Nortel.
In reply to a question as to the company's expected
issuance, Levin said it was reasonable to assume that
issuance would come about as a result of the exercise
of the option by Nortel.