KIH Kidron Ind.

RNS Number:1849R
Kidron Industrial Holdings Ld
13 February 2007


February 11, 2007


Attention:                                         Attention:

Israel Securities Authority             The Tel-Aviv Stock Exchange

http://www.isa.gov.il/                     http://www.tase.co.il/


Re: Kidron Industrial Holdings Ltd. - Immediate Report

In accordance with Regulation 36(A) of the Securities Regulations (Periodic and
Immediate Reports) 5730-1970


Further to the Immediate Report of February 8, 2007, Kidron Industrial Holdings
Ltd. (formerly Technoplast Industries Ltd., hereinafter, "Kidron Industrial
Holdings") hereby provides notice of the following:


 1. In the afternoon hours of February 8, 2007, Kidron Plastics Ltd.
    (hereinafter, "Plastics"), a subsidiary that is wholly owned by Kidron
    Industrial Holdings, received a letter from Psagot Financing and Factoring
    Ltd. (hereinafter, "Psagot"), with respect to the guarantee that Plastics
    had provided for payment of the debts of Kidron Plastics Distribution Ltd.
    (hereinafter, the "Guarantee" and "Plastics Distribution," respectively).


 2. Pursuant to such Guarantee, Plastics undertook to pay any debts of Plastics
    Distribution arising from factoring transactions for Plastics Distributions'
    sales to Zag Industries Ltd. (hereinafter, "Zag").


 3. Psagot's letter, as aforementioned, was sent following a letter that Psagot
    had received from the First International Bank of Israel Ltd. (hereinafter,
    the "International Bank") on February 8, 2007, which stated that Plastics
    Distribution was required to inform Zag that it (Zag) was required to
    refrain from paying Psagot the funds which were assigned to it under the
    factoring agreement.


 4. According to Psagot's demand, Plastics is required to pay for Zag's aggregate
    debts as of the date of this Immediate Report, which total approximately NIS
    3,600,000.


 5. As of the date of this Immediate Report, Kidron Industrial Holdings is unable
    to assess Plastics' ability to pay the sums demanded by Psagot, as
    aforementioned.


 6. In addition, on February 8, 2007, Kidron Industrial Holdings received a
    letter from the counsel of FITE - First Israel Turnaround Enterprise
    (Delaware), L.P. (hereinafter, the "Fund"), which stated that Kidron
    Industrial Holdings was in breach of the Loan Agreement of May 16, 2005. The
    Fund, in its letter, stated, among other matters, that on July 27, 2005,
    Plastics' shares became subject to a charge in favor of the Fund, and that
    the Fund intends to exercise its rights in connection with Plastics' shares.

 Sincerely,

 Kidron Industrial Holdings Ltd.


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