ELCO-Airwell/Fedders

Airwell Group to acquire Fedders Residential HVAC

PARIS March 14, 2008 – The Airwell Group is pleased to announce that it has today purchased from Fedders North America Inc. 100% of Fedders' Residential HVAC business, including current inventory, trademarks, technology and related assets.  The business will be conducted within Airwell-Fedders North America Inc., under Airwell Air Conditioning BV and its parent company ELCO Holdings, Ltd.

      The contract of sale and other aspects of the purchase have been approved by the United States Bankruptcy Court for the District of Delaware.

      This purchase represents the entrance of Airwell Air Conditioning, BV into the North American air conditioning market.  Airwell was founded in 1947 and is one of the world's leading manufacturers and distributors of air conditioners and central air conditioning systems with production facilities in France, Italy, Israel, China and Argentina, with marketing presence worldwide.  In 2006 Airwell posted annual sales exceeding US $500m.  Airwell Air Conditioning, BV is a wholly owned subsidiary of ELCO Holdings Ltd., headquartered in Tel Aviv, with consolidated annual sales of US $1.3b, employing more than 6,500 employees worldwide.

      ELCO Holdings is engaged in four distinct areas of business, commanding the largest share of the Household Appliance retail market in Israel.  The Holding company provides comprehensive Contracting and Electro-Mechanical Infrastructure products and services for commercial and residential market segments.  It also has commercial Real Estate investments in several high-growth geographies as well as being a premier provider of air conditioners on the international scene.

      Upon completion of the actual product line of Fedders Residential HVAC business, Airwell Fedders North America Inc. will have the ability to market a complete line of residential and light commercial heating and air conditioning products in the US market.

      Mr. Ulrich Bornkessel, CEO Airwell Group commented as follows: "Airwell is looking forward to completing the current Fedders' product range, offering a comprehensive line of the highest quality heating and air conditioning products at a fair price to the North American market.  Our goal is to take 60 plus years of production, marketing and innovative product development to successfully penetrate the North American market in the same manner as we have done in other markets around the world by leveraging on Fedders' excellent brand and professional distribution network.

      "Airwell has a global team, aligned on the common objective to continuously excel in our performance, and thereby provide sustained value to our customers, maintaining competitiveness through consistent profitability and growth.  Accomplishing our goal will take innovative and experienced personnel as well.  Therefore, it is my pleasure to appoint at this time Mr. David Pearson as General Manager of Airwell Fedders North America Inc."

      Compass Advisers, LLP, a New York based Investment Banking firm with offices in London and Milan, advised ELCO in this transaction.

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ABOUT AIRWELL GROUP

      The Airwell Group has 6 production sites world wide, some 2,700 employees and is represented in over 100 countries through more than 180 sales agencies.  In 2006, the company achieved a turnover of more than 500 million US$, half of it in Europe.  The Airwell Group is one of the leading companies in the field of air conditioning, headquarter in Guyancourt, close to Paris.  The most important brands in the company portfolio are AIRWELL, ELECTRA, POLENZ and WESPER. The Airwell Group is a wholly owned subsidiary of ELCO Holding Ltd.

ABOUT ELCO HOLDING LTD.

      ELCO Holding has its headquarters in Tel Aviv and is listed on the Israeli stock exchange.  ELCO has some 6,500 employees worldwide and is divided into four divisions: Electra Consumer Products Israel (domestic products), Electra Real Estate (ownership of commercial real estate assets), Electra Ltd. (construction and maintenance) and the Airwell Group (air conditioning systems).  ELCO achieved a turnover of 1.3 billion US$ in 2006, of which more than 500 million US$ was in air conditioning systems.