B.S.D. Crown Ltd Further update in relation to Israel 18

 
TIDMBSD 
 
BSD Crown Ltd. (LSE: BSD) 
 
                                (the "Company") 
 
                    Further update in relation to Israel 18 
 
                                            Ramat Gan, Israel, 16 November 2016 
 
Further to the announcement dated 30 September 2016 regarding the memorandum of 
understanding ("MoU") entered into by Israel 18 B.V. ("Israel 18"), a company 
controlled by Mr. Gregory Gurtovoy, and Ta'aman Food Marketing Ltd. ("Taaman") 
(together, the "Parties" ) to set up a 50:50 joint venture for joint control 
over BGI Investments (1961) Ltd. ("BGI"), the Company's controlling 
shareholder, following the loan agreement agreed between the Parties (the "Loan 
Agreement"), the Company hereby announces the principal terms of the MoU as 
announced by BGI: 
 
1.   Israel 18 will transfer all of its shares in BGI (approximately 71.5%) and 
the Company (approximately 19%) (the "Israel 18 Holdings") to a new company (" 
NewCo") and Taaman will pay Israel 18 US$10 million (the "Consideration") for 
50% of the shares in NewCo, such that the ownership of NewCo is split equally 
between Israel 18 and Taaman. 
 
2.   In the event that Israel 18 is not able to transfer the Israel 18 Holdings 
to NewCo, Taaman will hold 50% of the Israel 18 Holdings directly and the 
Parties will agree a different arrangement regarding the joint management and 
control of BGI within an agreed time frame from signing of the MoU. 
 
3.   In any joint venture structure agreed by the Parties the Israel 18 
Holdings will be held by Adv. Yaakov Amster (the "Trustee") who will act as a 
trustee appointed jointly by the Parties and the Trustee will hold the voting 
rights attached to the Israel 18 Holdings and vote them in accordance with the 
joint instructions of the Parties. 
 
4.   Until Mr Gurtovoy has fulfilled all of the necessary conditions under the 
MoU and the Loan Agreement, Israel 18 will be entitled to 50% of all dividends 
distributed by NewCo and its subsidiaries while the remaining 50% will go to 
Taaman. 
 
5.   The following acts will constitute a breach of the MoU (and, in some 
cases, the Loan Agreement): 
 
5.1. If Mr Gurtovoy/Israel 18 does not grant to the Trustee all powers of 
attorney necessary for the Trustee to exercise the votes attaching to any of 
the shares within the Israel 18 Holdings which are subject to separate legal 
disputes with third parties within an agreed time frame from signing the MoU 
and Mr Gurtovoy/Israel 18 fails to rectify the default within 14 days of that 
date. 
 
5.2. If Mr Gurtovoy/Israel 18 is not able to transfer all of its shares within 
the Israel 18 Holdings to the Trustee within a period of 18 months from the 
date of the MoU (excluding such shares that cannot be transferred because of 
the restrictions imposed pursuant to the Company's lawsuit against Israel 18 
(the "BSD Shares")). 
 
5.3. If Mr Gurtovoy is not able to transfer the BSD Shares within a period of 
36 months from the date of the MoU. 
 
5.4. If the Company's lawsuit against Israel 18/Mr Gurtovoy is successful and 
Israel 18/Mr Gurtovoy does not pay its debt to the Company, Taaman can repay 
the debt and charge such payment against Mr Gurtovoy's share of the Israel 18 
Holdings which will be valued at USD 10 million for these purposes. 
 
5.5. Mr Gurtovoy will have a period of 30 days to correct any violation of the 
MoU as stated above. 
 
6.   The Parties will convene general meetings of all of the stated companies 
within 30 days of the date of the MoU to replace all of the current directors 
with such new directors as are mutually agreed between the Parties. The 
representation on the board of directors will be proportionate to the holdings 
of the Parties in NewCo. 
 
7.   The following actions of NewCo, BGI and its subsidiaries will require the 
approval of both Israel 18 and Taaman: 
 
7.1. Any payment not within the ordinary course of business. 
 
7.2. Any loan, fundraising or increasing the relevant company's debt that is 
not within the ordinary course of business. 
 
7.3. Any loan or providing credit, collateral or indemnification to a third 
party. 
 
7.4. Any dividend payment or any adoption, amendment, implementation or 
cancellation of any dividend policy. 
 
7.5. The settlement of any lawsuit or legal or administrative proceedings 
regarding any of the companies in the group. 
 
7.6. Any disposal or grant of security over of any of Newco's assets or the 
assets of any of the other companies in the group. 
 
7.7. Any acquisitions. 
 
7.8. Any increase or dilution of Newco's share capital. 
 
7.9. The appointment of legal advisers and accountants to any of the group 
companies. 
 
8.   The MoU will be subject to the approval by the Israeli anti-trust 
authority and will not be binding or have any legal status until the approval 
is given as such, any of the above mentioned will not get into force as long as 
such approval will not receive . On receipt of this approval , the MoU will be 
implemented and the Company will be under the joint control of Israel 18 and 
Taaman. In this event, the MoU will constitute a binding and irrevocable 
agreement of the Parties. 
 
9.   In respect of any sale of shares in Newco, both parties will have rights 
of first refusal and tag-along/drag-along rights. 
 
10. The term of the Loan Agreement will be extended provided the voting rights 
attaching to the Israel 18 Holdings are held by The Trustee. 
 
11. It is BGI's understanding that the Loan Agreement and the MoU are 
independent agreements and neither agreement is in substitution for the other. 
 
12. In accordance with the Loan Agreement, Taaman will be able to sell any of 
the  shares comprised in the Israel 18 Holdings and use the proceeds to repay 
the loan in the event that Israel 18 does not repay the loan in accordance with 
the terms of the Loan Agreement (as stated in the announcement dated 29 
September 2016 issued  by the Company) 
 
Enquiries: 
 
Gregory Gurtovoy, chairman of the board: [e-mail] 
 
 
 
END 
 

(END) Dow Jones Newswires

November 16, 2016 05:29 ET (10:29 GMT)