EXHIBIT 99.1
------------
ELECTRIC FUEL CORPORATE NEWS
632 Broadway
New York, New York 10012
Tel: (212) 529-9200 - Fax (212) 529-5800
www.electric-fuel.com
FOR IMMEDIATE RELEASE
ELECTRIC FUEL COMPLETES A $3.5 MILLION
SECURED CONVERTIBLE DEBENTURE PRIVATE PLACEMENT
-----------------------------------------------
Investors also purchase 1,625,000 shares from shareholder in private placement
Company reduces liabilities by $1,100,000
NEW YORK, NY - JANUARY 6, 2003 - ELECTRIC FUEL CORPORATION (NASDAQNM: EFCX)
announced today the successful placement of an aggregate of $3.5 million
principal amount of secured convertible debenture with three institutional
investors. The investors also received 3.5 million warrants to purchase shares
of Electric Fuel's common stock, that, if exercised in full, could bring the
Company an additional $3.1 million in proceeds.
As of January 6, 2003 the Company has a cash position of approximately $5
million.
The Company also announced that the institutional investors purchased
1,625,000 of Electric Fuel shares held by the IES Group of companies controlled
by Haim Geyer, from which Electric Fuel purchased its IES subsidiary last year.
The IES group also gave the purchasers an option to purchase up to an additional
1,500,000 of their shares and agreed to refrain from trading in the Company's
stock for a period of nine months.
In addition the restructuring of the agreements with the IES group and the
former CEO has reduced the Company's liabilities by approximately $1.1 million.
Net proceeds from the private placement will be used to help ensure the
successful re-positioning of Electric Fuel as a supplier of portable power
solutions for the military. The Company plans to expand its military battery
operations, for which it received its first $2.5 million US Army contract last
month. Proceeds will also be used to aid in the expansion of the profitable MDT
and IES subsidiaries.
Electric Fuel Chairman, President and CEO Robert S. Ehrlich said, "We view
these developments as a clear vote of confidence in our new defense and security
direction. We now have a stronger balance sheet, stock that had been overhanging
the market has moved to significant institutional investors whose investment is
an endorsement of our strategic shift to defense and security, and we have
significantly reduced our 2003 obligations. Our new investors have taken a
significant debt and equity position, and this will allow us to move into 2003
with a focus on growing our defense and security business."
The convertible debentures bear interest at a rate of 9% per annum, with a
maturity date of June 30, 2005, and are convertible into shares of Electric
Fuel's common stock at a conversion price of $0.75 per share, adjustable only in
the event of a stock split or similar extraordinary activity. The investors also
received 3.5 million warrants to purchase shares of Electric Fuel's common
stock, at prices ranging from $0.84 to $0.93.
The convertible debentures are secured by substantially all the U.S.-owned
assets of Electric Fuel, including the assets of IES Interactive, a wholly-owned
subsidiary, and Electric Fuel's stock in MDT Protective Industries Ltd, a
majority-owned subsidiary.
The securities issued in the private placement have not been registered
under the Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent registration under the Securities Act and applicable
state securities or an applicable exemption from the registration requirements
of such act.
CONFERENCE CALL
Electric Fuel Corporation will hold a special conference call on Wednesday,
January 8, 2003 at 10:00 AM EST. To take part in the conference call, please
call 1 (800) 231-9012 (U.S.) or + 1 (719) 457-2617 (International) a few minutes
before the 10:00 AM EST start time. For your convenience, an instant replay will
be available Wednesday, January 8, 2003 at 1:00 PM EST until Friday, January 10,
2003 at 8:00 PM EST. The replay telephone number is 1 (888) 203-1112 (U.S.); +1
(719) 457-0820 (International) and the confirmation number is 666794
ABOUT ELECTRIC FUEL
Electric Fuel Corporation (www.electric-fuel.com) is a world leader in
primary and refuelable zinc-air fuel cell technology, pioneering advancements in
battery technology for defense and security products, military applications and
electric vehicles. Through its IES subsidiary, the Company develops,
manufactures and markets advanced high-tech multimedia and interactive digital
solutions for the training of military, law enforcement and security personnel,
and through its majority owned MDT subsidiary, the Company uses state-of-the-art
lightweight materials and engineering processes to armor vehicles for the
military, special forces and private concerns.
Electric Fuel has corporate and sales offices in New York and Denver with
research, development and production subsidiaries in the United States and
Israel.
COMPANY CONTACT:
Conrad F. Mir
Director of Investor Relations
(212) 529-9200, ext 111
mir@electric-fuel.com
EXCEPT FOR THE HISTORICAL INFORMATION HEREIN, THE MATTERS DISCUSSED IN THIS
NEWS RELEASE INCLUDE FORWARD-LOOKING STATEMENTS, AS DEFINED IN THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. READERS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, AS THEY ARE SUBJECT TO
VARIOUS RISKS AND UNCERTAINTIES THAT MAY CAUSE ACTUAL RESULTS TO VARY
SIGNIFICANTLY. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO,
RISKS RELATING TO: PRODUCT AND TECHNOLOGY DEVELOPMENT; THE UNCERTAINTY OF THE
MARKET FOR ELECTRIC FUEL'S PRODUCTS; CHANGING ECONOMIC CONDITIONS; DELAY,
CANCELLATION OR NON-RENEWAL OF PURCHASE ORDERS; SIGNIFICANT FUTURE CAPITAL
REQUIREMENTS; THE COMPANY'S ABILITY TO QUICKLY AND SMOOTHLY EXECUTE THE CHANGE
IN LEADERSHIP AS A RESULT OF ITS FORMER CEO'S RESIGNATION; AND OTHER RISK
FACTORS DETAILED IN ELECTRIC FUEL'S MOST RECENT ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2001, ELECTRIC FUEL'S MOST RECENT QUARTERLY
REPORT ON FORM 10-Q, AND OTHER FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. ELECTRIC FUEL ASSUMES NO OBLIGATION TO UPDATE THE INFORMATION IN
THIS RELEASE. REFERENCE TO THE COMPANY'S WEBSITE ABOVE DOES NOT CONSTITUTE
INCORPORATION OF ANY OF THE INFORMATION THEREON INTO THIS PRESS RELEASE.
#####