Eltek and the former Eltek Valere Minority Stockholders have today entered into a Settlement Agreement pursuant to which all disputes between the parties are fully and finally settled. Pursuant to the Settlement Agreement, Eltek has for 90 calendar days the option to purchase for cancellation all promissory notes issued to the Eltek Valere Minority shareholders (which are in the aggregate principal amount of approx USD 40.4 million), against a total payment of USD 30 million plus all accrued and unpaid interest under the promissory notes up until such payment.

Reference is made to previous announcements regarding the disputes between Eltek and the former Eltek Valere Minority Stockholders related to the Contribution Agreement of 2007 and the consideration paid to the former Eltek Valere Stockholders. Pursuant to the put option described in the Stockholders Agreement (entered into in conjunction with the Contribution Agreement), and under the Settlement Agreement, Eltek is under the obligation to issue promissory notes to the former Eltek Valere Minority Stockholders for an aggregate amount of approx USD 40.4 million (i.e. the approx NOK 235 million referred to in the announcement of 21 December 2009).

Eltek intends to exercise the option to purchase for cancellation the promissory notes for the lower payment, i.e. USD 30 million plus interest. The company is now investigating alternatives to finance the repurchase within 90 days, including the possible issue of a bond loan.

For further information, please contact:

CFO Pål Skistad, +47 9085 0378
CEO Jørgen Larsen, +47 9052 7930