TEL AVIV, Israel -- Nortel Networks (NYSE:NT)(TSX:NT) and Koor Industries (NYSE:KOR) today announced that they will reorganize their joint telecommunications activities in Israel. Under this reorganization, Nortel Networks will assume full ownership of Nortel Networks Israel (Sales and Marketing) Ltd., its joint venture with Koor Industries, by acquiring the remaining 28 per cent ownership interest currently held directly and indirectly by Koor Industries.

Nortel Networks Israel (Sales and Marketing) Ltd. is responsible for sales, marketing and support of Nortel Networks products in the Israeli market. Nortel Networks and Koor Industries will continue to work together through research and development and commercial agreements in Israel, mainly with Telrad Networks, a Koor Industries subsidiary.

"Nortel Networks has enjoyed a strong and growing presence in the European and Israeli markets for many years," said Steve Pusey, president, EMEA (Europe, Middle East, Africa), Nortel Networks. "This decision reinforces our commitment to this region. By establishing 100 percent ownership in Nortel Networks Israel, we are continuing to focus on growth markets with one of the industry's most comprehensive solutions portfolios."

"Koor Industries and its portfolio companies have a long-standing relationship with Nortel Networks in the local and international markets, both through their joint investment in Nortel Networks Israel (Sales and Marketing) Ltd. and through different development and marketing partnerships," said Jonathan Kolber, chief executive officer, Koor Industries. "We continue to work with Nortel Networks on a global basis, including identifying new and diverse areas for cooperation and mutual growth."

Koor Industries Ltd. is one of Israel's largest and leading investment holding companies, focusing on high-growth, internationally-oriented Israeli companies. Koor actively invests in telecommunications through its holdings in ECI Telecom (Nasdaq:ECIL) and wholly-owned Telrad Networks; in agrochemicals through Makhteshim Agan Industries (TASE: MAIN); in defense electronics through the Elisra Defense Group; and in promising start-ups in the fields of telecommunication and life sciences through Koor Corporate Venture Capital. Koor Industries is traded on the Tel Aviv and New York Stock Exchanges.

Nortel Networks has been active in Israel for over 25 years. Customers include Cellcom, the largest Israeli Wireless operator, and Pelephone Telecommunications Ltd., which has deployed Nortel Networks CDMA2000 1X solution. Nortel Networks enterprise voice and data solutions are commonly found in Israel's largest organizations, including government offices, banks, hi-tech companies, insurance companies, industrial companies and Internet Service Providers (ISPs).

Nortel Networks Corp.

Koor Industries Ltd.