3. In regards to the sale of the Company’s holdings in TGI –as of the date of this report the Company
does not have accurate information regarding the net consideration which would be
received from the transaction and which would be used for repayment to the Debenture Holders.
As aforesaid, as of the date of this report, the negotiations regarding the sale of TGI were
not yet completed, and accordingly, it is not certain that a sale agreement will be signed,
that the expected consideration will equal the consideration included in the cash flow
forecast or the date on which the consideration would be received by the Company.
4. It is noted, that according to the negotiations for the sale of TGI, the Company expects to receive
the majority of the consideration upon completion of the sale transaction, if completed, and that it
could be used to make payment to the Debenture Holders (assuming that there will be no other
restrictions from making such payments).The remaining part of the consideration is expected to be
deposited in escrow for a certain period to secure certain representations given by the Company.
In the preparation of the cash flow forecast, it was assumed that all of the expected consideration
from the sale of TGI, could be used by the Company for the repayment to the Debenture Holders,
however, as stated above, this is a mere assumption and there is no certainty that it would
materialize.
5. Generally, uncertainty is inherent in a forecast of sales of assets, mainly due to dependence on
third parties, inter alia, due to: the need to find potential buyers and to reach agreements with them
regarding the terms of the transaction, the need to receive relevant approvals, the Company's need
to obtain the approval of the debenture holders to some of the transactions, and the need of
potential buyers to reach agreements with financing parties in order to obtain funding for such
acquisitions.
6. As detailed in the press release issued by the Company on November 23, 2017, the Company
approached the trustees of the Debenture Holders (‘the Trustees’) requesting them to conduct
negotiations in relation to rescheduling the payments to the Debenture Holders (series A and B)
(‘the Debenture Holders’) due to reasonable possibility of delays in the sale process of TGI which
may prevent the Company from meeting the coming payment due in February 2018. On January
11, 2018, the Company announced it was unable to complete the sale transaction of its holdings in
TGI in a manner that will allow it to meet the payments to the Debenture Holders set for February
2018. On January 31, 2018, the Company issued an announcement clarifying and emphasizing
that the Company will not be able to execute the payments to the Debenture Holders scheduled for
February 2018, on time.
7. The cash flow forecast in respect to the debentures principal repayment is based on the payment
schedule as stated in the Deeds of Trust, including linkage to the Israeli CPI and interest at the rate
specified in the deed (without interest on arrears), including