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Board of Directors September 8, 2013

Electra Consumer Products ("ECP") Ltd. ("The Company") announces hereby, the Company's Board of Directors, held on September 8, 2013, the Board discussed and concluded the following decisions:

  • The Board of Directors discussed the structure of the Company's statement of financial position and the ratio between the Company's equity and the total of its statement of financial position. As on June 30, 2013, the Company's equity amounted to NIS 501 million and the total of the statement of financial position amounted to a total of approximately NIS 1,633 million, namely the equity amounted to about 31% of the total amount of the statement of the financial position. 
  • The Board of Directors decided that under these circumstances the Company's equity may be decreased in the amount of NIS 150 million and divide it among its shareholders. This action is expected to cause, inter alia, an increase in the return on the capital for the Company's shareholders.
  • The Board of Directors decided to decrease the equity by way of a buy-back offer - a tender offer in which the bidder will be the Company itself.
  • As on June 30, 2013, the Company does not have reserves in an amount that can be divided among the shareholders, namely, the "profit test", as defined in the Companies Law, is not met. Therefore, the Company will apply to the Court to receive its approval for this process, although the profit test is not met. 
  • An economical opinion, presented to the Board of Directors, stated that the Company will be able to fulfill its current and expected liabilities, namely to pass the insolvency test - after performing the said process. 
  • The Board of Directors stated that the buy-back offer will be published only after it will receive the approval of the court to perform the process. Therefore, the acceptance period for the buy-back offer will begin only after the approval of the court and after publishing a specification for the buy-back offer, as required by law, in which the price per share and other conditions of the buy-back offer will be determined. 
  • It is emphasized that the publication of the buy-back offer is subject to conditions according to the law, related to its actual publication and to its conditions.