Engel General Developers: Private Placement in a European Subsidiary HAIFA, Israel, Dec. 17 /PRNewswire/ -- Engel General Developers Ltd. , a leading housing developer in Israel and other emerging markets, today reported that following a letter of intent dated October 2003, a European subsidiary has entered into a transaction with an international investment fund specializing in real-estate (the "Fund"), pursuant to which said Fund shall become a partner in the Company's residential development activities in Central and Eastern Europe. The investment will be in the capital of Arces International B.V. ("Arces"), a Dutch subsidiary of the Company which consolidates these activities. Arces shall issue to the Fund 50% of its outstanding share capital in return for the amount of euro 15.5 million. The management of the projects in the Czech Republic, Hungary and Poland shall be performed by local companies affiliated by the Company, in return for management fees equal to 5% of the cost of construction and planning of the projects. In addition, a subsidiary of the Company shall be responsible for meeting the cost budget of the projects. Until the closing of the transaction the parties have agreed to complete certain actions, including obtaining the approval of the Czech antimonopoly authorities and other approvals. The Company views the Fund as an important and strategic partner which will enable it to increase the volume of is activity in Central and Eastern Europe. This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's filings with the Securities and Exchange Commission. DATASOURCE: Engel General Developers Ltd. CONTACT: Zohar Levy, CFO of Engel General Developers Ltd., +972-4-8422777, or fax, +972-4-8419333

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