Elran, Miloumor to invest $10m in Romania TV venture

Elran Holdings has a stake in troubled venture, Gilat DBS.

In its prospectus for an issue of convertible bonds, Elran Holdings (TASE: ELHD) gives details of failed investments in Gilat DBS, a venture of satellite broadcaster YES. Elran, controlled by the Dankner family, invested NIS 12.5 million in Gilat DBS, half of which has already been written off, due to the satellite company's woes.

In July 2002, Bank Hapoalim (LSE: BKHD; TASE: POLI) petitioned the Tel Aviv District Court to foreclose, via the appointment of a receiver, a floating lien on bonds issued in favor of the bank on all property and assets of Gilat DBS. Gilat DBS's other shareholders are the founders of Gilat Satellite Networks (Nasdaq: GILTF; TASE: GILTF), Migdal Insurance (TASE: MGDL), and Danbar Technologies (TASE:DNTE). Bank Hapoalim applied for the foreclosure because of Gilat DBS had not repaid a NIS 22 million loan. The court rejected the petition, and proceedings between parties are continuing.

Elran successfully raised NIS 70 million this week. It became clear today that Elran still believes in multi-channel television via satellite, albeit not in Israel. Elran and Miloumor (TASE: MILO) have an agreement to collaborate in a venture to set up in Romania a venture for multi-channel television (DBS) via satellite.

Elran and Miloumor will establish a company in equal shares, or will acquire at least 90% of an existing Romanian company. The parties have pledged to provide the Romanian company up to $10 million, in equal shares, and have established a dilution mechanism in the event that one party fails to inject its share.

Miloumor, controlled by Freddi Robinson, and Elran, controlled by Dori and Dan Dankner, are negotiating the acquisition with a third party through an allocation of shares in a Romanian-registered private company that launched the venture to provide multi-channel television by satellite. If these negotiations lead to an agreement, it will not affect the parties' financial commitments.

Romania currently has four cable television stations providing analog broadcasts.

Miloumor is one of the Israeli companies most associated with investment in Romania. It owns half of a Romanian distributor of Samsung handsets. Together with Yigal Zilka, it also owns a casinos in Loutraki and in Rhodes, Greece.

Published by Globes [online], Israel business news - www.globes.co.il - on March 10, 2005

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