Makhteshim Agan Industries Ltd. Update Regarding the Negotiations With ChemChina

TEL AVIV, Israel, November 21, 2010 /PRNewswire/ -- Koor Industries Ltd (hereinafter "Koor") today published an Immediate Report pursuant to the report of October 11, 2010, in respect of contacts concerning a strategic joint venture with the China National Chemical Corporation (hereinafter "ChemChina"), as part of which the Company is expected to become a private company. Koor announces that following a further round of talks with ChemChina that took place up until last Thursday and in view of the publication of the financial statements of the Company and of Koor for the Third Quarter in the coming days, Koor wishes to provide an update of the status of negotiations between the parties as they stand at the date of this Koor report, as follows:

A. The contacts between Koor and ChemChina are continuing with the joint object to reach a binding agreement, and it is expected that they will continue for some further weeks.

B. It arises from the discussions between the parties that there are likely to be changes in the structure of the transaction and its terms. Koor announces, inter alia, that the following topics are being discussed between the Parties:

1. Reduction in the Company's valuation for the purposes of the transaction, from USD 2.72 billion (as had been the case in the original understandings) to a lower value, with ChemChina seeking to put the valuation at USD 2.4 million, which reflects, at date of this report, a price per share of NIS 20.3 (the calculation being based on the effective holding which does not include treasury shares held by the Company and its subsidiaries, and using an exchange rate of the Shekel to the Dollar prior to the dilution expected to occur from exchange of employee options).

2. ChemChina seeks that Koor should not have a Put option as in the initial understandings.

3. The Parties are reviewing the possibility that as part of the transaction Koor should sell a smaller amount of the Company's shares than in the initial understandings, in such a way that Koor's holdings in the Company post the transaction would be higher than the level it was meant to have been in the initial understandings (namely 30%).

4. The possibility is being considered of organizing a non-recourse loan to Koor from a foreign bank against its shares in the Company, as shall be held by Koor following completion of the transaction, supported by ChemChina.

The Company emphasizes that Koor states in its immediate report today that the contacts between the parties are continuing at full speed, however at this stage there is no certainty that an actual binding agreement will be signed between the Parties in respect of the transaction, its timing and the final form and terms that will be determined.

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SOURCE Makhteshim Agan Industries Ltd