The Government Companies Authority is promoting a new plan for a public offering of a minority of the shares in Israel Aerospace Industries (IAI), and seeks thereby to garner $4.5 billion for the state, "Globes" has learned. The move is being led by Government Companies Authority director Yaakov (Yanki) Quint, and according to sources close to the process, a plan to float 40% of IAI at a company valuation of NIS 11 billion will be presented to Minister of Finance Moshe Kahlon and Minister of Defense Avigdor Liberman within the next few weeks.
The Ministry of Finance commented that "the move is in the initial stages and no plan has yet been drawn up; when it is, in cooperation with the company and the professional officials at the Ministry of Defense, it will be presented to the ministers."
IAI is a wholly state owned defense company. Proposals for flotation of the company have been raised in the past. Sources involved in the staff work initiated by Quint say that as in those proposals, the plan being formulated calls for a flotation in two stages. The sources say that conditions at IAI are now ripe for such a move, since in the past eighteen months the company has undergone a comprehensive streamlining plan that included downsizing of the workforce by 800 jobs, and it is about to consolidate its civilian divisions into one, which should result in considerable savings in administration expenses and manpower. The sources added that in the framework of the plan, the state will take steps to ensure its ability to control strategic production lines at IAI defined by the Ministry of Finance as "vital assets for the security of the country."
At the end of 2017, IAI had an orders backlog of over $11 billion, its highest ever. This was mainly thanks to a series of huge contracts with the Indian defense ministry for the sale of Barak 8 missiles worth a total of some $2.5 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 6, 2018
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