The Defense and Finance Ministries back the recommendations of an inter-ministerial committee to privatize Israel Military Industries, rather than rehabilitate the company and leave it in government hands, as decided earlier this week.

The director general of the Defense Ministry, Amos Yaron, said a timetable has not yet been set.

"I would very much like to see the IMI sold after a recovery plan is in place, but this depends on the consent of the workers," Yaron said.

Under the privatization plan, the operations of IMI, which in 1999-2000 lost $130 million, will be sold independently of the land that the factories occupy. That will remain government property.

The NIS 1.3 billion recovery plan calls for the treasury to provide $80 million over several years to cover early retirement costs. The treasury will also provide $20 million to $40 million in guarantees.

The Defense Ministry will handle a downpayment of NIS 225 million and infuse $30 million to $50 million over several years. The plan also depends on salary cuts and layoffs.

The treasury and Defense Ministry agreed that six plants that are not part of the IMI core business, including light arms and ammunition plants, will be put up for sale within the next few weeks. IMI estimates the value of these plants at $30-$60 million.