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Sheraton Moriah Israel Shareholders' to Invest in Company
To Enhance Value; Four Year Strategic Plan Includes
$20 million in Renovating Several Hotels


TEL AVIV, Israel, March 23, 2005 - Sheraton Moriah Israel ("Sheraton Moriah" or the "Company"), a leading Israeli hotel chain, announced today that its shareholders' - Koor Industries ("Koor") (NYSE: KOR) 55% shareholding, Starwood Hotels & Resorts Worldwide ("Starwood") (NYSE:HOT) 25% shareholding and Hapoalim Assets, a wholly owned subsidiary of Bank Hapoalim (TASE: POLI), 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 in EBITDA.

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".

About Sheraton Moriah Israel
Sheraton Moriah Israel, formed in 1999, operates and manages hotels throughout Israel, having full or partial proprietary rights in most of the hotels in the chain. The Sheraton Moriah Group operates a network of 9 hotels throughout Israel, approx. 2,220 hotel rooms, and is the largest international hotel chain in Israel. Sheraton Moriah's hotels are geographically spread throughout Israel, two hotels are located in Eilat, two in Jerusalem, two in the area of Tel Aviv, one in the Dead Sea, one in Tiberias and one facility in Hadera - Kfar Hayam.

Sheraton Moriah Eilat
Eilat, Israel

Sheraton Moriah Hotel
Neve Zohar, Dead Sea 86910
Dead-Sea, Israel

About Starwood Hotels & Resorts Worldwide (owns 25% of Sheraton Moriah Israel)
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 750 properties in more than 80 countries and 110,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis, The Luxury Collection, Sheraton, Westin, Four Points by Sheraton, W brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit

About Koor Industries (owns 55% of Sheraton Moriah Israel)
Koor Industries is a leading investment holding company, focusing on high growth, internationally-oriented, Israeli companies. Koor actively invests in telecommunications through its holdings in ECI Telecom, Telrad Networks and ECTel; in agrochemicals through Makhteshim Agan Industries; in defense electronics through the Elisra Defense Group; and in promising start-ups through Koor Corporate Venture Capital. Koor's ADSs (American Depositary Shares) are traded on the New York Stock Exchange (NYSE: KOR) and Koor's ordinary shares are traded on the Tel Aviv Stock Exchange (TASE: KOR).  For more information, please visit

About Bank Hapoalim (owns 20% of Sheraton Moriah Israel)
Bank Hapoalim is Israel's largest bank and leading financial group engaged in retail and corporate banking. The Bank Hapoalim Group in Israel includes 4 commercial banking subsidiaries, as well as financial companies engaged in credit card services, provident and mutual fund management, trust services, portfolio management and investment banking, each of which is a leader in its field in Israel. The Group also has holdings in non-financial sectors, which include insurance, real estate, tourism, high-tech industries and other economic sectors. Bank Hapoalim is the only Israeli Bank listed on both the Tel Aviv and London Stock Exchange. For more information, please visit


Ariela Mader
Sheraton Moriah (Israel)

Also See: Starwood Invests in Israel's Moria Hotels Chain / Jan 1999
Red Sea Resort Opens in Israel: Herods Sheraton Resort Eilat Offers New Theme Hotel, Convention Center and Spa / Nov 1998

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