"Baharav is committed to privatize Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1). More to the point, he was hired to privatize the company," Government Companies Authority director Doron Cohen told "Globes". Last month, Minister of Defense Ehud Barak and Minister of Finance Yuval Steinitz appointed former Amdocs Ltd. (NYSE: DOX) CEO Dov Barahav to succeed IAI chairman Yair Shamir, and began the transition a month ago.
Cohen added, "Shamir was an excellent partner in formulating the privatization plan, and played a key role in the preparation and submission of the necessary documents so that the plan would be relevant. The personnel changes at IAI must not affect its progress or cause more than slight delays. If Shamir was not being replaced, we would have already submitted to the government a proposal for privatizing IAI. That was my timetable 18 months ago, but stuff happened and it's the ministers who make the decisions."
Shamir was IAI chairman on a voluntary basis, and received no salary. Barahav, however, will reportedly receive a salary, although Cohen says that nothing has yet been closed.
Cohen tried to deflect the criticism of the decision to replace Shamir, and arguments that Baharav has no experience in the aerospace industry, or in IAI, its business, products, or customers. "He is very familiar with the capital market and with various technology sectors. He will learn matters quickly. He will pick up the baton from Shamir and continue to run. He has a track record and has proven capabilities. There are few people who managed companies of the size of IAI, especially not in high tech, and who have a wealth of experience trading on the TASE and foreign stock markets. Baharav is one of them. In truth, there is no reason for delays. Within six to eight weeks, we'll be back on track to privatize the company and submit a proposal to the government."
The IAI privatization proposal calls for an initial sale or offering of 30% of the company on the TASE by the end of 2012. Additional shares will be sold during 2014, eventually reducing the government's stake to 49%.
Cohen said, "Over the coming year, we will work with the Ministry of Defense on various points of the plan, such as creating mechanisms to protect IAI's classified information and Israel's security interests, and to prevent a takeover of the company by hostile parties. We'll make every effort to prevent a controlling core in the company - measures to better protect our interests."
Published by Globes [online], Israel business news - www.globes-online.com - on July 13, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011