משרד החוץ יצורף לוועדה לבחינת יצוא גז מישראל

Israeli businessman Yossi Maiman, who holds a 38.5% interest in PCB producer Eltek (Nasdaq:ELTK) of Petah Tikvah, will be helping the company through its financial travails.

Probably acting through his investment company Merhav, Maiman will be infusing $500,000 to Eltek in exchange for four-year convertible bonds bearing interest of 10% a year.

It transpires that Eltek has been trying to raise $1.5 million for six months now, from private investors and financial institutions, but to no avail. Maiman is the only one who agreed to infuse more money.

Maiman has been much in the news lately for his efforts to save Channel 10, which he alone kept afloat for months despite its cash burn rate of around $8 million a month.

Eltek is in the process of reorganizing and slashing costs, including through downsizing. The company today has 280 employees in Israel and another 30 in Germany.

"We need cash, that's no secret," says Arieh Reichart, the company's president and CEO. "We contacted the banks, which in principle are not willing to extend new loans. If the company makes serious efforts to organize its business to make it look more stable for the short and long run, and shows involvement of shareholders at the level of capital, the situation will be different. But we had trouble getting a new loan.

"I am glad to say Maiman was willing to lend us money. Now we can come to the banks and based on Maiman's loan, we can reschedule our debts over a longer range." Talks were progressing well, Reichart said, adding he hoped new terms could be agreed on soon.

Convertible notes was the agreed-on vehicle because Maiman was taking on major risk, Reichart says. "If the risk materializes, Maiman won't get anything," he points out, "and if the company makes it, he'll get shares at a low price." The conversion price is 33 cents per share, about the same as the share's market value today.

Eltek has yet to publish its financials for the fourth quarter and 2002. It will probably do so together with its report for the first quarter of 2003.

"Our accountants are KPMG and in Germany, they were not present for the inventory count by our subsidiary. So we could not publish our reports. Therefore, based on the results of the first quarter of 2003, we will reconstruct the results for the fourth quarter," he says.

The inventory aside, there is no other problem holding up the company's financials, he says.

The most recent figures available for Eltek are for the first nine months of 2002, for which Eltek reported revenues of $17 million, and a net loss of $1.9 million. At the end of the third quarter, it had $2.2 million cash and liabilities totaling $10.5 million short-range, and $15 million including long-range debt.

Eltek owes money to Bank Hapoalim, Bank Leumi and Bank Discount. The company hopes to achieve relief on the terms to ease its cash situation, Reichart says.

Maiman holds 28.6% of Eltek's shares directly. His son, his sister and a Panama-registered company of his, Integral International, hold others interests in the company. Eltek, listed on the Nasdaq smallcap, is traded at a market cap of $1.6 million.

Eltek stock