Scailex Announces Management Buyout of Jemtex
August 04 2006 - 6:00PM
PR Newswire (US)
TEL AVIV, Israel, August 4 /PRNewswire-FirstCall/ -- Scailex
Corporation Ltd. (NASDAQ:SCIXNASDAQ:&)(TASE:SCIX) announced
today that it has entered into a reorganization agreement with
senior management of Jemtex InkJet Printing Ltd., under which
Scailex transferred the majority of its holdings in Jemtex to two
senior managers. As a result, Scailex's interest in Jemtex was
reduced from approximately 75% to 15%. Under the reorganization
agreement, Scailex converted approximately $6.7 million out of $9.7
million of outstanding loans provided by Scailex to Jemtex into
shares of Jemtex. The remaining $3.0 million loan is payable to
Scailex over a period of five to seven years, except that the loan
will be deemed fully satisfied if $1.0 million is paid to Scailex
before the end of 2006 (and, if such sum is paid before
mid-September 2006, Scailex's remaining holdings in Jemtex will be
further reduced from 15% to 10%). In addition, for so long as the
$3.0 million loan remains outstanding, Scailex will have an option
to invest $5.0 million in Jemtex's shares at a pre-investment
valuation of Jemtex of $20.0 million. As part of the transaction,
the senior managers committed to continue their employment in
Jemtex for several years. As of March 31, 2006, Jemtex was fully
consolidated in Scailex's financial statements, and its net book
value on Scailex's balance sheet was nominal. Jemtex's quarterly
impact on Scailex's results over the last 4 quarters was an average
loss of approximately $1 million (including technology
amortization). Scailex is currently reviewing the accounting method
applicable to its holdings in Jemtex subsequent to the transaction.
Yahel Shachar, Scailex's CEO, commented: "Following the sale of the
operations of Scitex Digital Printing and Scitex Vision, Scailex is
no longer a significant player in the field of digital printing and
is currently exploring strategic alternatives in new areas of
operations. Continuing our support, financial or otherwise, of
Jemtex is not consistent with such goals, and, therefore, we have
determined to provide Jemtex's management the opportunity to
continue building the company. I would like to thank Jemtex's
management and employees for their hard work and professionalism
and wish them success in their new path." Scailex Corporation Ltd.
Scailex Corporation Ltd.'s shares trade on Nasdaq and The Tel Aviv
Stock Exchange under the symbol "SCIX". For more information,
please visit our Web site at http://www.scailex.com/. Forward
Looking Statements Except for the historical information herein,
the matters discussed in this news release include forward-looking
statements within the meaning of the "safe harbor" provisions of
the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements that are based on various assumptions
(some of which are beyond the Company's control) may be identified
by the use of forward-looking terminology, such as "may", "can be",
"will", "expects", "anticipates", "intends", "believes",
"projects", "potential", "are optimistic", "view" and similar words
and phrases. Actual results could differ materially from those set
forth in forward-looking statements due to a variety of factors,
including, but not limited to, (1) our absence of significant
operations following the sale of the business of Scailex Vision and
uncertainty as to our future business model and our ability to
identify, evaluate and execute suitable business opportunities, (2)
the fact that our U.S. shareholders may suffer adverse tax
consequences if we are classified as a passive foreign investment
company or PFIC, (3) changes in domestic and foreign economic and
market conditions, (4) the impact of the Company's accounting
policies, (5) risks relating to pursuing strategic alternatives,
(6) risks and uncertainties associated with the tax and accounting
consequences of the sale of the business of Scailex Vision, (7)
risks and uncertainties relating to the Company's plans for its
financial assets following the sale of Scailex Vision, (8) the fact
that we may be deemed an "investment company" under the Investment
Company Act of 1940 under certain circumstances (including as a
result of the investments of assets following the sale of the
operations of Scailex Vision), and/or the risk that we may be
required to take certain actions with respect to the investment of
our assets or the distribution of cash to shareholders in order to
avoid being deemed an "investment company", (9) risks and
uncertainties resulting from the sale of approximately 50% of our
outstanding share capital by our former two principal shareholders
to an unaffiliated third party and the potential impact on the
Company and our operations and strategies, (10) the impact of
significant changes in our board of directors and management
resulting from such sale, and (11) the other risk factors detailed
in the Company's most recent annual report and other filings with
the US Securities and Exchange Commission, including without
limitation, those set forth under such headings as "Risk Factors"
and "Trend Information" in the Company's Annual Report on Form
20-F. Except as may be required by law, the Company does not
undertake, and specifically disclaims, any obligation to publicly
release the results of any revisions which may be made to any
forward-looking statements to reflect the occurrence of anticipated
or unanticipated events or circumstances after the date of such
forward-looking statements. Contact Scailex Corporation Ltd. Yahel
Shachar Chief Executive Officer Tel: +972-3-607-5855 Fax:
+972-3-607-5884 E-mail: DATASOURCE: Scailex Corporation Ltd
CONTACT: Scailex Corporation Ltd., Yahel Shachar, Chief Executive
Office, Tel: +972-3-607-5855, Fax: +972-3-607-5884, E-mail:
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