With Ha'aretz, Ma'ariv
A new rehabilitation plan for ECI Telecom (Nasdaq:ECIL) involves selling holdings in affiliated companies, or even some of its units, and cutting jobs. The moves are designed to reduce ECI's debt to the banks by $250 million.
While plans to demerge ECI have been abandoned, a leaner and meaner version of the company might focus on two or three core units instead of five.
The plan also calls for moving certain manufacturing operations from the centrally located town of Petah Tikvah to the southern town Ofakim, Ma'ariv reports.
The news of the reorganization is reportedly causing an uproar among ECI's staff, reports, based on fears of further waves of dismissals.
The plan was compiled by a group of businessmen negotiating to buy a 12.5% stake in ECI Telecom's shares for $50 million. The group is headed by Shlomo and Aharon Dovrat, and the Ofer brothers Yuli and Sami, sources close to the talks confirmed yesterday.
According to these sources, the new group of investors have reached an agreement with the board of directors of ECI Telecom's parent company, Koor Industries (NYSE:KOR) to appoint a European communications executive as chairman of ECI in the stead of Jonathan Kolber, who also serves as Koor's CEO.
A deal is expected to be announced this week, as early as tomorrow.
Shlomo Dovrat is slated to assume a part-time role in the active management of the company. Sources at ECI explained that this involvement by Dovrat gives the pending deal a strategic aspect beyond its financial terms.
Koor's board of directors does not plan to ask for the resignation of Doron Inbar, the CEO of ECI. But Inbar may decide to yield his position to a candidate proposed by a new chairman of ECI.
The sources added that ECI's management is also in an advanced talks to sell its holdings in ECtel(Nasdaq:ECTX).