Update of Demarcation of Activities at Elco Ltd. ("The –Immediate Report Re: Company")
The company is hereby announcing that on 3.1.2016, Elco's Board of Directors, after having obtained approval of its Audit Committee, approved an update of the demarcation of activities in the Elco Group that was first approved on 24.3.2013 (see Immediate Report of the Company from that date Reference No. 2013-01-018559, included in this Immediate REport by way of reference – Hereinafter The Original Arrangement).
In accordance with the original agreement, the business proposals received in the Company in housing clusters will be offered to Elco North America, Inc. a wholly owned (100%) subsidiary of the Company (Hereinafter ENA), where if ENA is not interested in the business proposal, it will inform the Company of its disinterest, and the Company will be entitled to transfer the proposal to any other party. In accordance with the decisions made by Elco's Audit Committee and Board of Directors following the strategic decision by Electra Real Estate Ltd., a subsidiary (58.6%) of the Company (Hereinafter Electra Real Estate), to enter the field of housing clusters in the US and to focus on earning assets and housing clusters, business proposals received in the Company in housing clusters will now be offered to Electra Real Estate, and not to ENA. If Electra Real Estate is not interested in the business proposal, it will inform the company of its disinterest, and the Company will be entitled to transfer the proposal to any other party.
Furthermore, in light of said decision by Electra Real Estate, it was determined, in the context of the business proposals received by the Company in real estate ventures in Israel, that they will be offered to the subsidiary (53.1%) Electra Ltd. (Hereinafter Electra) only, and not to Electra Real Estate and Electra as to be determined in the original arrangement.
Other than the aforementioned, no change will be made to the original arrangement. It is hereby clarified that the update of the original arrangement is subject to obtaining the consent of the banks financing the activities of Electra Real Estate in Israel, and as long as said consent is not given, the original arrangement will remain as is, unchanged.