Sheraton Moriah Israel Shareholders’ to Invest

24th Mar 2005

Sheraton Moriah
Israel, a leading Israeli hotel
chain, announced today that its shareholders’ - Koor Industries 55% shareholding, Starwood Hotels & Resorts Worldwide 25%
shareholding and Hapoalim Assets, a wholly owned subsidiary of Bank
Hapoalim , 20% shareholding, have developed, together with the Company, a
new strategic plan for the Company for the next four years. In 2004, Sheraton Moriah Israel, Israel’s largest international hotel
chain, generated an operating profit, a 24% increase in revenues, an 18%
increase in occupancy rates, a 10% increase in prices and a 98% increase

The new strategic plan, aimed at leveraging on the Company’s position as
Israel’s largest international hotel chain, the steady improvement in
Israel’s tourism industry, the Company’s improved results and the overall
optimistic outlook for the industry going ahead, will include the
following measures on the part of the shareholders -
- Converting all shareholders’ loans, and other outstanding shareholders’
debts, to equity (approx. $27 million).

- Investing over $20 million in the Company, over the next four years,
giving the Company the necessary resources to further identify growth
opportunities, to enhance the Company’s differentiation and leadership in
the local market, and to promote investment in renovating certain hotels.

The Company also agreed on reaching a new debt refinancing agreement with
Bank Hapoalim.

In addition, the Company’s board of directors recently signed an MOU with
Mr. Yoav Igra, the Company’s 50% partner in the Herods Hotel Complex,
which includes Herods Vitalis, Herods Palace and Herods Forum, terminating
all disputes, with a view to further leveraging on the Herods Complex’
position as the leading resort hotel in Eilat.


Adv. Ron Feinstein, Chairman of Sheraton Moriah Israel, commented:
“Following the crisis in the local tourism industry and the local
hospitality industry, the Company took substantial measures to maintain
the chains leading position. We are pleased that the Company’s
shareholders are showing their appreciation and support of the measures
taken by the Company, its management and employees, by reaching the above
decision and setting the Company on a new course. We plan on investing
approximately $20 million in renovating and upgrading several of the
hotels, and identifying new management projects”

Roeland Vos, President of Starwood EAME, commented: “We decided to
continue to invest and support Sheraton Moriah as a result of our belief
in the Israeli tourism product, the clear indications of change in this
field, mainly in the inbound tourism, and out of appreciation to our
Israeli partners - Koor and Bank Hapoalim.”

Jonathan Kolber, Chief Executive Officer of Koor Industries, said: “The
change in the local political environment, the significant improvement in
Koor’s results and the initial indications of recovery in the local
tourism industry created this decision aimed at giving Sheraton Moriah the
tools to develop its activities with a view to enhancing the value of our
holding in the Company. We are no longer seeking to sell our stake in the
Company, and will continue to work closely with our partners, and the
management of Sheraton Moriah, to create value”

Dan Dankner, Chairman of Hapoalim Assets, added: “We are encouraged by the
positive changes in Israel’s tourism industry and continue to support the
Company as Israel’s largest international hotel chain”.

Eli Gonen, CEO of Sheraton Moriah Israel concluded: “We are encouraged by
the improvement in Israel’s tourism industry, the steady improvement in
the Company’s financial performance and the initial optimism surrounding
Israel’s tourism industry as a whole. Assuming the local tourism market
continues to improve, the new equity structure will help improve the
Company’s financial results and will give us the necessary tools to
leverage on the expected growth in the tourism market”.


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