Immediate Report – Update regarding Change in Strategy of Demarcation of Company Activity
The Company hereby announced that on 3.1.2016, the Company's Board of Directors updated the Company's strategy in which the Company would focus on earning asset activities including (subject to consent of the banks financing the Company's activities in Israel) entry into housing clusters in the United States.
Accordingly, the Company's Board of Directors approved, after having obtained approval of its Audit Committee, that subject to obtaining approval of the banks financing the Company in Israel as previously mentioned, the demarcation of activities arrangement will be updated in the Elco Group that was first approved in the Company on 20.3.2013 (See Immediate Report of the Company from that date Reference No. 2013-01-012667), included in this Immediate Report by way of reference – Hereinafter The Original Arrangement) as follows:
1. In accordance with the original arrangement, the business proposals received at Elco Ltd. , which controls (58.6%) the Company (Hereinafter Elco) in housing clusters, Elco North America, Inc., a wholly owned subsidiary (100%) of Elco (Hereinafter ENA) will be made the offer. In accordance with the updated arrangement, the Company will focus on earning assets and housing clusters in the US, and pursuant to this strategic decision, the business proposals received by Elco in housing clusters will from hereon in be made to the Company and not to ENA. If the Company is not interested in the business proposals, it will inform Elco of its disinterest, and Elco will be entitled to transfer the proposal to any other party.
2. In addition, in light of the strategic decision of the Company, and without limiting the Company's ability to independently act in real estate ventures in Israel, the updated arrangement will set forth, with regards to the business proposals received at Elco in real estate ventures in Israel, that these will be offered to the subsidiary (53.1%) of Elco – Electra Ltd. (Hereinafter Electra) only and not the Company and Electra as set forth in the original arrangement.
With the exception of the aforementioned, no other amendment will be made to the original arrangement.