Isal: ECI will compensate new investors $60m if its presentations are deemed false - TheStreet

Isal: ECI will compensate new investors $60m if its presentations are deemed false

Statements made when selling 12.5% stake to Dovrat, Ofers expire after 2002 report is okayed
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Dovrat and Ofer, the two Israeli business groups that are buying a 12.5% stake in ECI Telecom (Nasdaq:ECIL) for $3.8 per share will receive $60 million in compensation, if the acquisition turns out to have been based on false presentations by ECI.

That is the gist of an announcement by Dovrat's company Isal Amlat Investment to the Tel Aviv Stock Exchange yesterday.

When negotiating the equity placement, ECI made certain presentations regarding the condition of its business and activity. These presentations expire, however, 14 days as of the date its 2002 financial statements are approved by its board.

Compensation, if any is due, does not have to be made in cash. It could be made in shares, also priced at $3.8 each. Meanwhile ECI stock has climbed to $6, a level last seen in June 2001.