Defense Minister Avigdor Lieberman has ordered a halt to preparations for an initial public offering in the state-owned Israel Aerospace Industries because of fears of possible security breaches, Israeli business daily Globes reported on Monday.
The company was considering selling a minority stake publicly, but Lieberman ordered a halt to the preparations after Defense Ministry officials expressed concerns that outside investors might become privy to highly classified information, the report said.
According to the report, the freeze will remain at least until senior ministry officials complete a detailed review of the potential implications and risks of offering IAI shares to the public.
The Defense Ministry declined to comment on the report. An IAI spokeswoman was not immediately available.
IAI Chief Financial Officer Eyal Younian told Reuters in March last year that to help finance planned acquisitions by the company, the government needed to move ahead soon with plans to sell a 20% stake in the company on the Tel Aviv Stock Exchange.
Younian said the company needed to issue bonds or borrow money from banks and pay interest of 3% to 4%. An IPO would raise new capital, minimizing the need to borrow.
IAI has annual sales of about $3.7 billion and a backlog of orders exceeding $9 billion.
The 64-year-old company, which helped pioneer the development of military drones and produces satellites, missiles and radar systems, is planning to acquire companies and set up subsidiaries in countries including India and the United States, where protectionist policies demand that defense spending increasingly benefit local industry.
