Further to the report of Koor Industries Ltd. ("the Company") on 16 January, 2013 (Ref. 2013-01-015882) concerning receipt of a proposal on the subject in reference from the Company's controlling shareholder, UDB Development Ltd. ("the Proposal"), the Company hereby reports that today, the Board of Directors of the Company convened and resolved to appoint an independent panel consisting of external directors and independent directors of the Company ("the Committee"), and authorized the Committee to review the Proposal and make any other necessary examinations, and if it sees fit, to negotiate the terms of the transaction and the wording of the agreement. The Committee will deliver its recommendations to the Audit Committee and the Board of Directors of the Company. The Committee was also authorized to seek the assistance of experts and consultants at its discretion.

The Company clarifies and emphasizes once again that the details of the Proposal have not yet been discussed by the competent organs of the Company. It is further clarified that if and insofar as the transaction is made, it will require various approvals of regulatory bodies, approvals pursuant to the Companies Law, 1999 and other requisite approvals. Naturally therefore, there is no certainty at this stage that the move will be made, and this includes the uncertainty as to reaching consensus with IDB Development concerning the transaction and its terms, or that all the requisite approvals for its implementation will be obtained.




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