General Announcement::Immediate Report: Settlement Agreement - GIS

Issuer & Securities

Issuer/ Manager
THE ISRAEL ELECTRIC CORPORATION LTD.
Stapled Security
No

Announcement Details

Announcement Title
General Announcement
Date &Time of Broadcast
25-Dec-2018 17:23:18
Status
New
Announcement Sub Title
Immediate Report: Settlement Agreement - GIS
Announcement Reference
SG181225OTHRUEBW
Submitted By (Co./ Ind. Name)
Yael Nevo
Designation
SVP & General Counsel
Description (Please provide a detailed description of the event in the box below)
Further to that stated in clarification 34b to the financial statements of the Israel Electric Corporation Ltd. (hereinafter: "the Company") for the year ending December 31, 2017 (reference number: 2018-01-025432) and clarification 9.b.4) to the Company's financial statements for the period ending September 30, 2018 (reference number: 2018-01-110898) regarding a suit filed by the Company against five companies (hereinafter: "the Defendant Companies ) regarding the global cartel in the GIS oligopoly market between the years 1988-2004 (hereinafter: "GIS Cartel" and the "Company's Claim respectively); and regarding a request to approve a class action that was filed against the Defendant Companies and against the Company in respect of the GIS Cartel (hereinafter: the "Request for Approval"), and further to the Company's immediate report of December 12, 2018 (reference number: 2018-01-121185) regarding the agreed upon language of the settlement agreement reached by the parties to the Company's claim and the request for approval (hereinafter jointly: "the Parties"), the Company is pleased to announce that following a mediation proceeding between the parties, said parties completed the process of signing a compromise agreement, under which and subject to its approval by the court in a final judgment, the Defendant Companies undertook to pay the Company a total of NIS 465 million (hereinafter: the "Settlement Agreement" and the "Settlement Amount" respectively). In addition, according to the compromise agreement, the Defendant Companies will also pay the Company the amount of the fee paid by them (approximately NIS 19 million), in whole or in part, insofar as it is not reimbursed to the Company.

The settlement amount includes the payment of compensation and fees to representative petitioners and their counsel in the total amount of NIS 15 million, subject to court approval. The settlement amount, less said remuneration and fees, and less the Company's legal expenses, is likely to benefit electricity consumers (the "Group") through electricity rates and subject to the Electricity Authority s decision in this matter. Pursuant to the Settlement Agreement, all Company claims and suits against the Defendant Companies and Group claims against the Defendant Companies and the Company in connection with procurement proceedings for the acquisition of GIS arrangements, which the Company held between 1988 and 2004, will be removed in accordance with and subject to the provisions of the Settlement Agreement.
In accordance with the Settlement Agreement, the parties must submit a request for approval to the court. The validity of the Settlement Agreement is subject to the approval of the court, however, it is not guaranteed that said approval will be granted. The Company will update this matter in accordance with developments and subject to any law.


The Israel Electric Corporation Ltd.
By:
Ofer Bloch, CEO
Yael Nevo, SVP & General Counsel