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Urdan to supply Turkey with tank parts
DANIEL KENNEMER
11/22/2005
To fill the order, Urdan signed a $7m. agreement with Ashot Ashkelon Industries Ltd.
Israeli Military Industries, which has been tasked by the Turkish Army to upgrade 173 M-60 tanks with new sling systems and other parts, signed several deals Sunday with Urdan Industries Ltd. and its subsidiaries. Urdan Armored Combat Vehicles Ltd., a subsidiary of Urdan Industries, agreed with IMI to provide sling systems and accompanying services, Urdan told the Tel Aviv Stock Exchange Monday, putting the deal's value at roughly $26.2 million. The materials would be supplied to IMI over a two-year period beginning in the fourth quarter of 2006, Urdan said. To fill the order, Urdan signed an agreement valued at $7m., also on Sunday, with Ashot Ashkelon Industries Ltd., an IMI subsidy in the process of privatization, whereby Ashot will provide Urdan sling arms, retainers, and other key components to be integrated into the sling systems over a two-year period beginning in the third quarter of 2006. "Approval of the company's audit committee and directorate was required for the sake of caution due to concern that the deal may be an exceptional deal in which [Ashot's] controlling stakeholder, Israel Military Industry Ltd., could have a personal interest," Ashot told the TASE. Ashot said it would supply the equipment in a series of regular supply orders beginning in December 2005 and continuing over a three-year period. In a third deal related to the Turkish Army contract signed Sunday, Orlite Industries (Millennium 2000) Ltd., a wholly (but indirectly) owned subsidiary of Urdan, agreed with IMI to provide ammunition holders for the tanks. Urdan and Orlite valued this deal at $9.5m., and said that the equipment would be supplied over a 30-month period beginning in the third quarter of 2006. The Turkish Army is free to cancel or suspend the project if unspecified "inconveniences" arise, in which case certain conditions and compensation arrangements will apply to IMI's original contract with the Army as well as its contract with its Urdan suppliers and Ashot's agreement with Urdan. In all three agreements, the suppliers (Urdan ACV, Ashot and Orlite) promised to provide their immediate clients (IMI and Urdan ACV) with bank collateral worth 6% of each deal's value.
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