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Ministerial Committee Rejects Sharon Plan to Save Ata by Selling Firm

The Ministerial Economic Committee voted 9-3 today to reject the proposed sale of the bankrupt Ata textile mills to a syndicate of American and Swiss investors.

The deal, signed last Friday by the purchasers and Minister of Commerce and Industry Ariel Sharon, was denied ratification by the economic ministers on grounds that the costs to the government would be too high. The three who supported the deal were Sharon and Deputy Premier and Housing Minister David Levy of Likud and Energy Minister Moshe Shahal of the Labor Party. Shahal said he would appeal the decision before the Cabinet plenary.

Sharon, who has been active for months trying to save the mills and the more than 1,000 jobs it provides, was bitter after the committee meeting. He claimed the decision was dictated by irrelevant considerations but would not elaborate. He insisted the government would not have to bear higher costs than predicted when he signed the deal.

The cost to the government was put at $21.9 million, mainly to retire debt and compensate some 350 workers who were to be dismissed. But over the weekend that estimate was called into question by various sources who maintained that the government would have to lay out at least $35 million. There is no money in the State budget for the purpose and the Knesset Finance Committee would be hard pressed to find the sum. The government, which placed Ata in receivership many months ago, has been urgently seeking a buyer for the complex which is the largest employer in the Haifa area.

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