home Geo-politics Israel IMI’s Privatization Set in Motion

IMI’s Privatization Set in Motion

Mar 9, 2015

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The bid for the privatization of Israel Military Industries (IMI) opened on March 5 2015, completed with ads run in the press and the Government Companies Authority’s (GCA) internet site. The privatization of IMI is taking place on schedule. The GCA, headed by Ori Yogev, announced on Thursday March 5, through ads published in the press and on its internet site, the commencement of a procedure to sell Israel Military Industries to a private investor.

According to the Privatization Resolution approved by the government, IMI will be privatized in a single block, except for one classified unit, which includes interests and infrastructures. This unit will remain under ownership of the State of Israel and will be managed by a government owned corporation called “Tomer-Systems”.

In addition, the resolution stipulates that by 2020, IMI will operate from its site in Ramat Beka, in the Negev. The company will vacate its current properties in Israel’s central district.

In accordance to the Privatization Resolution, the GCA took actions to prepare the company ahead of the process, inter alia, by formulating the various required arrangements among the relevant parties including the Ministry of Finance and the Ministry of Defense, the company’s management the Labor Union representatives and others.

These preparations comprised a great deal of effort, including the conclusion and signing of collective agreements. Thus, questions concerning the company’s recovery and its privatization were resolved. This pertains to the immediate retirement of 1,170 employees, arrangements with the company’s retirees and the retirement of 950 employees after the privatization takes place. Simultaneously, for the purpose of the implementation of the collective agreements, financing agreements between the company and the State of Israel were also signed.

In accordance with the sale procedure published in the GCA’s internet site, applications may be submitted to the GCA no later than May 13 2015. After this deadline, the received applications will be examined by the GCA and other relevant agencies, including aspects of financial strength, which will be looked at by the GCA and the security point of view to be inspected by the MOD. In a later date, for those investors who will obtain the State of Israel’s approval, the company will open information rooms where comprehensive data about IMI and its activity will be exhibited. It is the GCA’s intent to complete the process through the end of 2015

Only individuals who are citizens and residents of the State of Israel or Israeli corporations will be allowed to participate in the sale process. Nevertheless, the indirect participation of foreigners and foreign corporations will be permitted as stock holders holding up to 90% in an Israeli corporation bidding for IMI, if the corporation was legally incorporated in Israel under the Companies Law, whose routine management and center of business are in Israel and an Israeli entity is holding directly 10% or more of a particular type of means of control in the corporation.

It should be noted, that at the end of 2014, the GCA selected Stiefel Nicolaus Investments Bank, joined by Bank Leumi, to accompany the GCA in the sale process with the aim of identifying potential foreign investors to compete in the bid for the sale of IMI, with the intent of maximizing the benefits from the sale process for the people of the State of Israel.