Koor Gets Preliminary New Loan Conditions For Credit Suisse Shares

Koor Industries Ltd. (KOR.TV) said Monday it has reached a preliminary agreement with lenders Citigroup Inc.(C) and Morgan Stanley (MS) to improve the conditions for loans it took out to finance its holding in Credit Suisse Group AG (CS), which declined sharply in value over the last year.

Koor said the agreement would reduce the interest rate on the loan and reduce its outstanding credit to a maximum of 500 million Swiss francs ($545 million).

Koor now owes about CHF750 million to the banks. The agreement would also lower the price of Credit Suisse shares at which the banks can demand immediate repayment from Koor from CHF14 to CHF12. Credit Suisse shares were trading at CHF20.02 at 1018 GMT Monday.

Before implementing these new terms, Koor and the two banks must finalize their agreement.

Koor has been buying and selling shares of Credit Suisse since 2009, and recently reported that it lost about three billion shekels ($800 million) on such investments since January.

Despite that loss, Koor continues to invest in Credit Suisse, recently purchasing about ILS200 million more in shares.

IDB Holding. Corp. Ltd.(IDBH.TV), a large Israeli holding company with interests mainly in real estate, technology and industrial manufacturing, holds 49.5% of Koor, a company investing in telecommunications and other technological development and manufacturing.

At 1025 GMT, shares of Koor were down ILS0.66, or 1.47%, at ILS44.26, and shares of IDB were down ILS1.99, or 4.64%, at ILS40.90, in a lower Tel Aviv market.

-By Sara Toth Stub, Contributing to Dow Jones Newswires, [e-mail]