After the distribution to shareholders, ECI will be left with a 16% stake in ECtel. ECI CEO Doron Inbar: We remain committed to ECtel's success.
ECI Telecom (Nasdaq: ECIL) today announced that it would distribute 7.6 million of its shares in ECtel (Nasdaq: ECTX) to ECI's shareholders. ECI currently holds approximately 10.5 million, or 58%, of ECtel's shares.
After distribution of the shares, ECI will still remain a large shareholder of ECtel, holding approximately 16% of ECtel's outstanding shares. Following the distribution, ECI will no longer consolidate ECtel`s results in its financial statements.
The distribution of the shares is subject to approval by the Tel Aviv District Court the consent of ECI's banks, and a ruling from the tax authorities. ECI’s board intends to declare the distribution and fix the record date when these approvals are obtained, which ECI expects, will happen in May. The board will then determine the precise number of ECtel shares to be distributed for each outstanding ECI share.
ECI president and CEO Doron Inbar said, "We believe that distributing a portion of our shares in ECtel to our shareholders will increase the liquidity of ECtel's shares and broaden ECtel's shareholder base. It will allow ECI's management to focus on growing ECI's core business and returning it to profitability. ECI will remain a large shareholder of ECtel because it believes in the future of its business under its new management team. ECI expects to retain a seat on ECtel's board and remains committed to the success of Ectel.”
Published by Globes [online] - www.globes.co.il - on March 22, 2004