Israel to privatise Israel Military Industry at $1.6 billion cost

JERUSALEM (Reuters) - Israel's parliament on Wednesday gave final approval to privatise state-owned Israel Military Industries (IMI), which has been cash-strapped for years despite developing some of the country's best-known battlefield equipment.

The move, to be completed by 2014, will cost the government 5.7 billion shekels (952.3 million pounds), including severance pay for 1,170 employees and the erasing of 2.5 billion shekels of debt.

IMI's classified operations will be transferred to a new, smaller state-owned firm called Tomer, according to a statement by parliament's Finance Committee, which approved the privatisation.

A committee spokesman said a tender for the sale of the company will be issued within the year.

IMI manufactured the Uzi submachine gun and has developed missiles, tank guns, body armour and other combat systems, much of which is exported.

(Reporting by Ari Rabinovitch; Editing by Tova Cohen)