Elbit Systems in Soltam acquisition talks

[Globes] - Yokne'am-based Soltam is suffering liquidity problems.

Elbit Systems Ltd. (Nasdaq: ESLT; TASE:ESLT) is holding preliminary talks to acquire control of Soltam Systems Ltd. a manufacturer of artillery systems, ammunition and accessories for armies worldwide as well as kitchenware. Market estimates are that the deal could be worth tens of millions of dollars.

Soltam Systems, located in Yokne'am, is controlled by Mikal Group owned by Miko Gilat and Roni Naftali, and has 330 employees. The company is headed by Dudu Marciano who previously served as Mikal Group's business development manager. Marciano took over at Soltam at the end of 2008 at the request of the owners in order to implement a restructuring program.

Two weeks ago, Soltam reportedly contacted suppliers and asked for assistance in reducing debt obligations in exchange for post-date checks because the company was suffering liquidity difficulties. Soltam's management is also in talks with the banks about easing credit terms and spreading debts. Soltam's problems stem from a project in Kazakhstan where the government unilaterally decided to stop payments due to internal political struggles.

Elbit Systems said, "Elbit Systems is a public company and does not disclose business dealings except when there is an obligation to report."

Soltam Systems said, "We are not accustomed to giving out information about dealings relating to the company."