TAT Technologies Reports First Aviation Services Inc. ("FAvS"), Which is 30% Owned by TAT, Entered Into a Transaction With its Controlling Stockholder for a $3 Million Loan

TAT Technologies Ltd. (NASDAQ: TATT – News), a leading provider of services and products to the commercial and military aerospace and ground defense industries, reported today that effective June 29, 2012, First Aviation Services Inc. (“FAvS”) entered into a transaction with its controlling stockholder, Aaron Hollander (“Hollander”), pursuant to which FAvS borrowed $3 million from Hollander, secured by a third lien on the assets of FAvS. The loan bears interest at 10% and in addition Hollander was issued warrants to purchase shares of Class A Common Stock of FAvS representing 15% of FAvS post-exercise at an exercise price of $7.00 per share. Such exercise price reflects an equity value for FAvS of approximately $6.7 million. TAT’s management believes that this is not necessarily an accurate indicator of the fair value of FAvS.

TAT presently owns approximately 30% of FAvS and upon full exercise of the warrants its holding will be diluted to approximately 25.5%. As of March 31, 2012 TAT’s interest in FAvS is recorded on its books at a value of approximately $5 million. TAT also has a second lien on the assets of FAvS.

TAT is in the process of evaluating the accounting implications of this transaction for purposes of its financial statements and, in connection therewith, is expected to perform a valuation analysis.