Release Details

Immediate Report - DBS Dilution Agreement

November 18, 2001
The Securities Authority, Jerusalem, Israel
The Tel Aviv Stock Exchange, Tel-Aviv, Israel
The Registrar of Companies, Jerusalem, Israel

Dear Sirs,

Immediate Report - DBS Dilution Agreement.

Immediate notice is hereby given in the matter of D.B.S.
Satellite Services Ltd. ("DBS"), as follows:

A. The Board of Directors of the Company approved,
on 15 November 2001, the Company's contracting with other
shareholders in DBS, in an agreement setting out an agreed
mechanism for dilution of the holdings of those shareholders
in DBS who have ceased to invest in the company, and adjustment
of the percentages of holdings of the shareholders for their
investments in DBS ("the Dilution Agreement").

1. Under the Dilution Agreement, the dilution will be
implemented in two stages:

(a) In the first stage, which will be implemented immediately,
the holdings of Bezeq in DBS will increase from 30% to 44.9%.

(b) In the second stage, which will be implemented in April 2002,
the adjustment of holdings will be completed so that the part of
each shareholder in DBS will reflect the rate of its actual
investments in DBS (except for shareholders' loans, which a
shareholder may elect to leave as such).

2. For the purposes of the Dilution Agreement, the investments
of the shareholders in DBS will be computed plus interest at
a rate of 5.5%, accumulated annually, with linkage to the
Consumer Price Index.

B. With the increase of Bezeq's holdings in DBS from 30% to 44.9%,
Bezeq is expected to record an increase in the proportional rate
of its losses in DBS.

Yours sincerely,

Shlomo Koppel
Company Secretary

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