Israel Electric Corp. owns 40% of IBC, the venture that will

deploy a nationwide fiber to the home network.

Israel Electric Corporation (IEC) (TASE: ELEC.B22) employees will receive 10% of the fiber optic venture in which the utility is a partner, under a deal between IEC’s management and union. Sources inform ”Globes” that IEC’s board of directors was supposed to discuss the issue, but that it was dropped from the agenda, after the director representing the Government Companies Authority objected.

IEC owns 40% of IBC, the venture that will deploy a nationwide fiber to the home network. Sweden’s ViaEuropa AB and a consortium of Israeli companies owns the rest of IBC.

The sources said that in the talks between IEC’s management and workers committee, it was agreed that employees would receive 15% of IEC’s stake in IBC for free (amounting to 6% of IBC), and that they can buy up to another 10% of IEC’s stake (4% of IBC) at its economic value.

IEC needs the full participation of its employees for the fiber optic venture to materialize. Among other things, it plans to hire for the venture 150 employees who will work under a special collective agreement, the terms of which have not yet been settled in full. IEC also plans to transfer scores of tenured employees to IBC to carry out additional work for it in addition to their regular jobs.

Allotting IBC shares to IEC employees is intended to promise their cooperation and give them an incentive to work for IBC’s success. Previous talks between IEC’s management and employees had discussed giving the employees 15% of future business development subsidiaries, which were never established because of government objections.

If IEC’s employees gain a stake in IBC it will set a precedent in the 90-year old utility and at government companies in general. The allotment of shares to employees had been discussed in negotiations of reforms at IEC and atAshdod Port Company Ltd. and Haifa Port Company Ltd..