Israel Brodie Reports on Potash Company Pact with Israel Govt.

The potash works at the Dead Sea in Israel, idle since the Arab-Israel war in 1948, are scheduled to resume operations at an early date under an agreement initialled by the Israel Government and Palestine Potash Ltd., it was announced today by Israel B. Brodie, a director of the potash company and vice-chairman of the Palestine Economic Corporation, largest common stockholder in Palestine Potash, Ltd.

Speaking at a press conference, Mr. Brodie said that the resumption of potash production will “make a substantial contribution to the well-being of Israel.” Mr. Brodie, who has just recently returned from an extended stay in Israel where he took a leading role in the negotiations between the Israel Government and Palestine Potash Ltd., noted that the potash works had been a major source of foreign exchange through the export of its products which have an annual value of about $7,000,000.

Mr. Brodie stated under the agreement that there will be established a new Israeli corporation which will take over the assets, liabilities and operations of Palestine Potash Ltd. In this new company, Mr. Brodie added, the Israel Government will hold 51 percent of the voting rights, the stockholders of Palestine Potash Ltd. 25 percent and new Israeli investors 24 percent. The government will have a majority of one on the board of directors, he added.

“The government undertook by public issues or otherwise to furnish approximately the equivalent of $7,000,000 to $8,000,000 to bring the plant to an early production of 150,000 tons of potash annually, “he reported. He stressed that this production will be “substantially increased thereafter” and noted that “bromine production will also be resumed.”

“Potash ordinary shareholders will receive 33 1/3 percent of the equity of the new company,” Mr. Brodie said. “The plan,” he added, “is to be finalized by an exchange of stock of Palestine Potash Ltd, for stock of the new corporation. There are other provisions which will reinforce the security of the old investors. The new company will also be considered an approved undertaking under the Law for the Encouragement of Capital Investment, approved by the Israel Parliament.

“In view of the substantial commitments which the Israel Government has undertaken under this agreement,” Mr. Brodie said, “the old company’s representatives thought it only fair that the government should be given a controlling vote in the affairs of the company.” He added that the new agreement “demonstrates that the Israel Government is earnestly endeavoring to encourage private initiative in the country.”