Israel Military Industries privatization to proceed

IMI Systems

The Government Companies Authority will order a third valuation and ask the Antitrust Authority to explore the potential sale to Elbit.

The Ministry of Finance and the Government Companies Authority will continue the process of privatizing Israel Military Industries, now known as IMI Systems Ltd.,and will order another valuation of the company.

In March, it was discovered thatPrometheus, one of two firms to conduct a valuation on behalf of the Government Companies Authority, also consulted for a subsidiary of Elbit Systems.

Elbit is the only company left in the bidding for IMI. Prometheus, managed by CEO Yuval Zilberstein and Eyal Szewach, filed its valuation last December, after which it consulted for the Elbit subsidiary. Prometheus'smanagement realized what had happenedand reported it to the Ministry of Finance. They clarified that the consulting services to the Elbit unitwere unrelated to the parent companys efforts to acquire IMI.

After the embarrassing mishap was revealed, the Ministry of Finance considered cancelling the privatization tender. On Wednesday, senior officials at the Ministry of Finance including Government Companies Authorityhead Ori Yogev, Accountant General Michal Abadi-Boiangiu, and Budget Department director Amir Levi discussed the future of the privatization process.

It was decided thatthe tender would continue, but that the Government Companies Authority would contact a third firm to conduct a third valuation of IMI. Aside from the Prometheus appraisal, the GCA also hasa valuation from Fahn Kanne.

Sources familiar with the matter told Globes on Thursday that the Government Companies Authority would quickly contract with a firmto conduct thevaluation, and thatthe process wouldprobably take no more than a month.

The information and all the figuresrequired for thetaskare already available, whichmakes it possible to conducta valuation in a relatively short time, said one official. Industry experts said the valuation would cost the stateNIS 200,000-300,000.

In addition,in the next fewdays, the Government Companies Authority will ask the Antitrust Authority to explore the consequences of Elbit acquiring IMI. In the past, sources involved in the matter warned of the effect the purchase would have on the domestic defense market the creation of a new monopoly.

Meanwhile, the government has approved the appointment of IMI chairman Maj. Gen. (res.) Udi Adam asdirector general of the Ministry of Defense. Adam will replace current director general Maj. Gen. (res.) Dan Harel towards the end of the month.

Minister of Defense Moshe Yaalon is also advancing the appointment of Brig. Gen. (res.) Uri Agmon to IMI chair and will soon approve the selection together with Minister of Finance Moshe Kahlon.

Published by Globes [online], Israel business news - www.globes-online.com - on May 8, 2016

Copyright of Globes Publisher Itonut (1983) Ltd. 2016

 
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