Appointment of Trustee

Kidron Industrial Holdings Ld
01 March 2007

                                                    R. YOHAY & CO., LAW OFFICES

                                   TOP TOWER,  50, DIZENGOFF ST., TEL AVIV 64332
           FAX: [phone]      e-mail: [e-mail]   TEL:  [phone]




ROBERT YOHAY                                                         GILL RIMON



Tel Aviv, 26 February 2007




            Re: Kidron Industrial Holdings Ltd. Company Announcement


Kidron Industrial Holdings Ltd (hereinafter: "the Company") has announced to the
Tel Aviv Stock Exchange and to the Israeli Securities Authority as an immediate
report, that the Mr. Alon Fradkin, CPA., has been appointed as the Company's
special administrator and trustee of the Company in stoppage of proceedings (the
Israeli equivalent of a trustee under chapter 11 of the US law) (hereinafter: 
"the Trustee").



The company has also announced to the Tel Aviv Stock Exchange and to the Israeli
Securities Authority, as an immediate report, that on 20 February 2007 the
Tel-Aviv district court ordered that the hearing of the motion to realize a
fixed charge over Kidron Plastics Ltd.'s share capital, a motion filed by the
limited partnerships that the FITE fund is comprised of (hereinafter: "the FITE
Fund") be delayed until receipt of  the Nazerat Ilit District Court's approval
for taking actions by the Fite Fund against the Company, this in view of the
Nazerat Ilit District Court's stoppage of proceedings order given on 15 February
2007.



Subsequent to the Tel-Aviv district court's above order, the Fite Fund filed to
the Nazerat Ilit District Court, on 21 February 2007, a motion to permit and
allow the Fite Fund to realize the fixed charge over Kidron Plastics Ltd.'s
share capital (Kidron Plastics Ltd. being a wholly owned subsidiary of the
Company). As of this date, such motion is still pending.



On 22 February 2007, the Fite Fund and the Trustee, reached an agreement with
respect to the following arrangement:



1. The day to day operation and management of Kidron Plastics Ltd. shall
   be performed by a representative of the Fite Fund alongside with a
   representative of the Trustee.


   In the event that a dispute between such representatives arises, the
   Fite Funds' representative's position shall prevail.



2. The Trustee's representative shall be the Trustee himself or someone
   in his behalf, and the Fite Fund's representative shall be Mrs. Naomi Gold
   (unless the Fite Fund opts to appoint a different representative).



3. The Trustee shall have the right to file petitions to the district
   court against day to day management decisions made in accordance with the 
   Fite Fund representatives' prevailing position and contrary to the Trustees'
   position.



4. In matters that do not concern the day to day operation of Kidron Plastics 
   Ltd., including the realization of its share capital or property, the
   course of action taken shall require the full consent of both the Trustee and
   the Fite Fund and shall be subject to the court's approval.



5. Subsequent to the reaching of the said arrangement, all powers and rights 
   held by Kidron Plastics Ltd.'s board of directors are suspended and the
   Trustee's and the Fite Fund's appointed representatives shall have all powers
   and rights previously vested with Kidron Plastics Ltd.'s board of directors 
   with respect to the day to day opreration of Kidron Plastics Ltd., pursuant 
   to Kidron Plastics Ltd. memorandum and articles of association.


The Trustee and the Fite Fund further agreed to act swiftly to receive the
approval of the First International Bank of Israel Ltd. (holder of a floating
charge over Kidron Plastics Ltd.'s property) to the above understandings and to
the continuation of operation of Kidron Plastics Ltd..


The above arrangement has been filed to the Nazerat Ilit District Court in order
to receive the court's approval to it.





                                Yours Sincerely,


                               Gill Rimon, Adv.
                          R. Yohay & Co., Law Offices




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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