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Electra LTD

The Company's Audit Committee and Board of Directors approved today for Electra Construction Ltd, a wholly owned subsidiary of the Company (Hereinafter Electra Construction) to engage through a partnership owned and controlled by Electra Construction with Midtown Ltd. (Hereinafter Midtown) in a construction contract whose financial scope is NIS 717.4 million (turnkey), and that the construction is expected to last about three-and-a-half years (Hereinafter The Contract). Midtown is a private company owned by Eurocom Real Estate Ltd – 37.5%, Pangaya Real Estate Ltd. – 37.5%, Electra Real Estate Ltd. (sister company of the Company) – 12.5% and Electra Investments (1988) Ltd. (Company subsidiary) (Hereinafter – Electra Investments) – 12.5%. Midtown is building the Midtown Project in central Tel-Aviv. For more information about the project that, according to the planning as of the date of this Immediate Report, should also include a 50-storey residential building (approximately 338 apartments), 17,000 square meters (gross) of commercial space, and a 75,000 square meter office building (Hereinafter The Project) – See Section 40.1 of the Description of the Corporation's Business report that was included in the Company's periodic report for 2013 and published on 25 March 2014 (Reference Number: 2014-01-022959). The project's total area amounts to 86,000 square meters underground, approximately 40,000 square meters above ground of the residential building, and approximately 77,000 square meters above ground of office building. The Contract does not apply to the work for which Midtown will pay the said Partnership 8% + cost. The works including demolition, casing, anchoring, groundwater, and work related to the stores. The parties have yet to agree on the consideration for the finishing works in the underground commercial area, the above ground commercial buildings, the sports facility, preschools, development work and outside work. The Company's Audit Committee and Board of Directors noted that the Contract is part of the normal course of business of Electra Construction and is in its best interest, and will allow for the continued development of its businesses. Engagement in the contract is made following a review of the projected profit, risks involved and assessment as well as pricing of the direct costs that will be required to implement the turnkey contract.