Koor Industries Cancels Agreement to Sell Tadiran Batteries Subsidiary to Electric Fuel

Koor Industries Ltd. (Tel Aviv, Israel) has cancelled an agreement to sell its Tadiran Batteries subsidiary to Electric Fuel Corp. (Iselin, NJ) for $42.3 million in Electric Fuel shares. The Israeli holding company said it will, however, invest $10.0 million in Electric Fuel in exchange for a 5.3-percent stake of the company. Within six months, Koor's stake in Electric Fuel is likely to reach 7.7 percent, the company said in a statement to the Tel Aviv Stock Exchange.

Electric Fuel announced that, although it will not proceed with the acquisition of Tadiran Batteries Ltd., it will focus on expanding its core business of zinc-air batteries for consumer markets. The company has agreed to register the shares and may adjust the price when the restrictions on selling the shares are removed in six months.

Yehuda Harats, Electric Fuel president and CEO, said, "We are experiencing rapid growth in developing marketing channels for our ZincAir line of cellular phone batteries, including distributors, retailers and more recently, carriers. We want to focus on expanding our core business."