Electrochemical Industries - 1952 - Ltd. Reports On Option Allotment to ICC Handels AG.
Business Editors
ACRE, Israel--(BUSINESS WIRE)--April 17, 2000--Electrochemical
Industries (1952) LTD. (AMEX:EIL)("EIL" or "THE COMPANY")--
Notice to Shareholders Regarding the Allotment of Securities under
the Companies Law - 1999, the Securities Regulations (Allotment of
Securities in a Listed Company not offered to the Public) - 1992 and
the Securities Regulations (Limitations Regarding Conflict of Interest
between a Listed Company and a Controlling Shareholder therein) - 1994
and on the Convening of an Extraordinary General Meeting.
1. Preamble
After receiving the approval of the Company's Audit Committee
dated April 10, 2000, the Company's Board of Directors decided
on April 16, 2000, subject to receiving the approvals detailed
in Clause 7 below, on the allotment of 3,000,000 options, which
can be exercised into 3,000,000 ordinary shares of NIS 1 of the
Company (subject to adjustments) (hereinafter: the "Options")
to ICC Handels A.G. (hereinafter: the "Offeree").
The Options will be exercisable into ordinary shares of the
Company of NIS 1 under the terms detailed below. The Options
will not be listed for trading on the Tel-Aviv Stock Exchange
Ltd. (hereinafter: the "Stock Exchange") or on the American
Stock Exchange in the United States ("AMEX"), but the shares
resulting from the exercise of the Options will be listed for
trading on the Stock Exchanges.
2. The Offeree
2.1 The Offeree holds directly most of the issued share
capital of the Company and is a controlling shareholder
in the Company. The Offeree is a subsidiary fully owned
and controlled by ICC Trading Inc. which is in turn a
subsidiary fully owned and controlled by ICC Industries
Inc., which also holds the Company's shares.
(hereinafter ICC Industries, ICC Trading and ICC Handels
will jointly be referred to as - the "ICC Companies").
Correct as of April 10, 2000, the ICC Companies hold
about 59% of the issued share capital of the Company,
from which about 55.4% is held by ICC Handels and about
3.8% is held by ICC Industries. Assuming that all the
offered options will be exercised by the Offeree
according to this notification, soon after their
allotment, ICC Companies will hold approx. 62.05% of the
issued share capital of the Company, and in full
dilution (assuming the exercise and conversion of all
the existing securities in circulation, including
Debenture (Series 12), ICC Companies will hold approx.
54.42% of the issued share capital of the Company.
2.2 ICC Industries Inc. is a private holding company
registered in the State of New York in the U.S. and is
wholly owned and controlled by Dr. John Farber (71.59%),
who serves as a director and the Chairman of the
Company's Board of Directors, his wife, Maya Farber
(3.44%) who serves as a director in the company and
their four children: Sandra, Debra and Michael Farber
and Claudia Sullivan, who each hold approx.
5.85% of the shares of ICC Industries.
3. Allotment of the Options
7 business days after the Company informs the Offeree that all
the approvals required to effect the allotment as mentioned,
have been received (hereinafter: the "Determining Date"), the
Options will be allotted to the Offeree by the Company gratis.
4. Terms of the Options
4.1 General
The Options will not be listed for trading on the Stock
Exchange, and can be exercised into ordinary shares of
NIS 1 of the Company as mentioned in Clause 4.2 below.
Subject to restriction of the Stock Exchange, the rights
and obligations of the Offeree under the Options, may be
transferred, in part or in full, by the Offeree at its
choice to any of the ICC Companies and/or to companies
which directly or indirectly are wholly owned by each of
the ICC Companies.
4.2 Exercise of the Options
The Options, in full or in part, may be exercised, at
any time into ordinary shares of the Company
(hereinafter: the "Exercised Shares") for a period of
two years as from their allotment, by a written notice
of the Offeree to the Company, together with a cash
payment of the exercise price (hereinafter: the
"Exercise Notice"; and at the time of delivery of the
Exercise Notice will hereinafter be referred to -
"Exercise Date").
4.3 Listing the Exercise Shares for Trading
The listing of the Exercise Shares for trading will be
effected soon after their allotment by the Company. The
Exercise Shares may be listed in the future by the
Company for trading on AMEX.
4.4 The Exercise Price
The exercise price of any option will be equal to 95% of
the average closing price of the Company's shares on the
Stock Exchange 90 trading days prior to the Exercise
Date, but not less than NIS 5.7 per share (the "Exercise
Price"). Correct as of April 3, 2000, 95% of the average
closing price of 90 prior trading days is NIS 5.35 per
share, therefore the exercise price of the Options is
NIS 5.70 per share.
The economic value of the Option according to the
calculation formula set forth in the Stock Exchange's
directives is about NIS 1.47 for each option and in
total about NIS 4,410 thousand. This economic value is
based on the following assumptions: the price of the
Company's shares on the Stock Exchange on April 10,
2000, which was about NIS 5.85 per share, the price to
exercise the Options correct as at April 10, 2000 in the
amount of NIS 5.35 for each option, an annual
capitalization rate of 9.5%, standard deviation - 35%
and the exercise of the Options on April 19, 2002.
5. The Arguments of the Board of Directors regarding its
preference for the Private Offer over an Offer to the Public
In the resolutions of the Company's Board of Directors, the
following arguments were mentioned why it preferred a private
offer under the circumstances in general over an offer to the
public in particular:
5.1 The exercise of options for shares, if exercised, will
result in an increase of the Company's equity and will
improve the financial strength of the Company by way of
reducing the ratio of liabilities to equity.
5.2 The private offer given to the Offeree is preferable
over an offer to the public, because of significant
savings in the financial costs compared with that
involved in raising funds from the public and due to the
long period required to raise funds.
5.3 The exercise of the Options to shares, should they be
exercised, and the increase in the Company's equity as a
result, will facilitate the rapid realization of
strategic development plans in view of the inflow of
funds resulting from the exercise of the Options, and an
improved potential to raise further sources of funds.
6. The Directors who Participated in the Discussions
6.1 The decision of the Audit Committee regarding the
private offer was accepted by the votes of the
Directors: Amnon Neubach (an external director), and
Shmuel Rotem (an external director). The said Directors
do not have a personal interest in the private offer.
6.2 The Board of Directors' resolution regarding the private
offer was accepted by the Directors: Yair Rotem, Amir
Endvelt, Mark Ratner, Amnon Neubach (an external
director) and Shmuel Rotem (an external director). The
said Directors do not have a personal interest in the
private offer.
6.3 Dr. J. Farber, Maya Farber and John L. Oram are included
in the controlling shareholders of the ICC Companies and
serve as members of the Company's Board of Directors,
and therefore did not participate in the discussion
and in the resolution.
7. The Approvals Requires
The allotment of options is subject to receiving the following:
7.1 The approval of a general meeting of the Company's
shareholders as mentioned below.
7.2 Approval of the Stock Exchange to list for trading the
shares which will result from the exercise of the options.
Allotment of options will be carried out on a fixed date and in
any case at least 30 days after delivery of this notice.
8. The Powers of the Securities Authority
In accordance with Regulations, the Securities Authority or an
employee authorized by it, is empowered within 21 days from the
date of submitting the Immediate Report relating to the above
allotment, to instruct the Company to amend one of the items
appearing in the Immediate Report, which the Company submits
together with the delivery of this report, or to give an
explanation, details, information and documents regarding such
an item within the period determined, and they are entitled to
instruct the Company to amend the Immediate Report in
accordance with the explanation, the details, the information
and the said documents, within a specified time. In such a case
an amendment to the Immediate Report will be published in such
a way as the publication of the private allotment according to
the Regulations, or in a way which the Authority or an employee
authorized by it instructs, and the date of the general meeting
will be delayed by 21 days from the date of publication of the
amended Immediate Report and the date of the allotment of
securities in accordance with the private allotment will not be
prior to the date of its approval by such deferred general
meeting.
The instruction to amend the Immediate Report by the Securities
Authority or an employee authorized by it, is likely to delay
the convening of a general meeting until implementation of the
provisions to the satisfaction of whosoever gave the
instruction.
9. Perusal of Documents
A copy of this notice and the approvals mentioned in it, is
available for perusal at the registered office of the Company
in the industrial area of Akko during regular working hours, up
to the date of convening of a general meeting to approve the
allotment.
10. Notice of Convening a Special General Meeting
10.1 Notice is hereby given regarding the convening of a
Special General Meeting of shareholders in the Company
at the offices of ICC 135 Dizengof Road, Tel Aviv on
Thursday, May 18, 2000, at 10:00 and agenda for this
will be a discussion of the private allotment, details
of which are given in this notice above.
10.2 The general meeting may approve the private allotment,
the subject of this notice, by a decision taken by a
poll, provided that one of the following will exist: (a)
In the poll the majority will include at least a third
of the total votes of shareholders who are not
personally interested parties for the approval for the
private allotment, and who are present at the meeting;
counting all the votes of the said shareholders will not
take into account votes of those abstaining; (b) The
total votes opposing among the shareholders mentioned in
sub-clause (a) will not exceed a rate of 1% of the total
voting rights in the Company.
10.3 In accordance with the Company Regulations (Publication
of Notice of General Meeting of the type of meeting of a
Public Company) - 2000, the determining date for
determining entitlement to vote will be May 14, 2000.
10.4 In accordance with the Company Regulations (Proving
Ownership of Shares for the Purpose of Voting at a
General Meeting) - 2000 the shareholder in whose credit
a share is registered with a member of the Tel Aviv
Stock Exchange Ltd., and that share is included among
the shares listed in the Register of Shareholders in the
name of a nominee company, the Company will submit a
certificate regarding ownership of the shares on the
determining date, in accordance with Form 1 of the
Appendix to the above Regulations.
10.5 The shareholders are entitled to vote personally or by
proxy. The document appointing a proxy to vote or power
of attorney should be deposited at the Company's offices
at least 48 hours prior to the date fixed for the
meeting.
--30--cl/ph*
CONTACT: Electrochemical Industries Ltd.
Adv. Yair Kohavi, Corporate Secretary,
Tel: 972-4-9851497, Fax: 972-4-9815797
KEYWORD: INTERNATIONAL AFRICA/MIDDLE EAST
INDUSTRY KEYWORD: CHEMICALS/PLASTICS INTERNET BANKING
COPYRIGHT 2000 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.
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