Pilat Technologies Files The Pilat Media Demerger Prospectus

Information Release: 12 September 2001

London 12th September 2001 - Pilat Technologies International Limited ("Pilat" or "The Company"), the Israeli software and consulting group co-listed on AIM and the Tel Aviv Stock Exchange, today announces that, in advance of the proposed EGM to approve the demerger of its media software business (Pilat Media), it has submitted the first draft of the prospectus to the Israeli Securities Commission.

This follows the decision taken by the board in December 2000 to demerge Pilat Media in 2001 and the subsequent preparations undertaken since that time. A date for the EGM will be set further to approval from the Israeli Securities Commission, at which a 75% approval from shareholders is required in order for the demerger to proceed. Subsequent approvals will also then be required from shareholders, creditors, the Israeli tax authorities and the London and Tel Aviv stock exchanges. Pilat is currently actively pursuing all of the above.

The draft prospectus states that, according to Israeli law, the demerger will be executed as a "horizontal split". Pilat Media will acquire all of the assets and liabilities of the media business in consideration for its newly issued shares. Pilat Media shares will be allotted to Pilat shareholders pro rata to their current shareholding. It is the intention of the Board that shares in the new media software company will be listed on both AIM and the Tel Aviv Stock Exchange.

The rationale for the demerger is to enhance overall shareholder value through allowing increased focus on the development of its two diverging areas of core expertise, namely (1) software, consultancy and services for human resource management offered internationally from offices in the UK, USA and Israel, and (2) the provision of television channel and airtime management software for broadcasters and content providers around the world. The Pilat board believes that it will be in the interests of the shareholders to split Pilat into two independent businesses that will be more attractive to specialist resources, investors and management alike. Pilat is being advised by Investec Henderson Crosthwaite.

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