The Knesset Finance Committee today approved the privatization of Israel Military Industries Ltd. (IMI), allowing the move to go ahead. Two weeks ago, the Histadrut (General Federation of Labor in Israel), IMI's workers committee, IMI's management, the Ministry of Defense, and the Ministry of Finance signed the privatization agreements.
The heart of the privatization is the retirement of 1,200 IMI employees over the next 18 months. IMI CEO Avi Felder said that the first group of employees will retire in May, followed by 80-100 employees a month. "One third of IMI's employees will retire soon under list drawn up for two years. This is not an easy thing to do, but we have thought deeply about keeping production capacity and proprietary knowhow," he said.
Most of the retiring employees will receive a severance bonus of NIS 1.3 million. The 950 employees will stay at IMI after its sale will receive a NIS 720 million safety net to protect their pension rights.
IMI's privatization will cost the government more than NIS 5 billion, including writing off the company's bad debts to the government and owners loans to buy raw materials and pay salaries.
"By the end of 2015, IMI may be a private company," said Felder. The Finance Committee's approval of IMI's privatization will open the race for private investors to acquire it. Sources involved in the process say that 10-15 companies and consortia will be interested in the company, which they believe can be sold for NIS 2-2.5 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2014
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