ECI Telecom (Nasdaq:ECIL) on Thursday signed an accord for a private placement of 12.5% of its ordinary shares with a group of Israeli investors, in exchange for $50 million, Koor Industries (Nasdaq:KOR) announced today.
The placement dilutes the Koor Industries (NYSE:KOR) interest in ECI from 34.7% to 30.4%. Koor has already announced it will be posting a capital loss of $17.8 million.
Clal Industries' 14.5% interest will be diluted to 13%. It will be recording a $6.4 million capital loss.
The accord governing the purchase of 13.6 million ECI shares is subject to approval by ECI's board and the boards of the investing companies, Isal Amlat Investments, controlled by the Dovrat family, and the Ofer brothers.
The $50 million infusion will decrease ECI's deficit to about $60 million.
The terms are as ECI reported: a share price of $3.8. ECI closed on Friday a steep 43% above that at $5.4.
The investment group is entitled to appoint two members to ECI's board. One will function as vice chairman, indicating that incumbent vice chairman David Rubner, formerly ECI's chief executive, will be replaced.