CELLCOM ISRAEL : ANNOUNCES UPDATE RE. XFONE's PURCHSAE UNDER INSOLVENCY PROCEDURES (Form 6-K)

CELLCOM ISRAEL ANNOUNCES UPDATE RE. XFONE's

PURCHSAE UNDER INSOLVENCY PROCEDURES

Netanya, Israel - October 6, 2021 - Cellcom Israel Ltd. (TASE: CEL) (hereinafter: the "Company") announced today that following its previous reports regarding the insolvency proceedings of Marathon (018) Xfone Ltd., or Xfone, and offers for Xfone's purchase under these proceedings (the last of which was filed on Form 6-K on September 27, 2021), on October5, 2021, the court appointed arrangement manager submitted a report to the court noting that in light of the results of the creditors' meetings, in which none of the offers received the required majority, the proceeding came to a dead end and the only alternative he sees for a settlement arrangement for Xfone is formulation of agreements among the corporation controlled by Mr. Yariv Lerner and the Clearmark Fund (hereinafter: the "Potential Buyer"), Xfone and its controlling shareholder (who submitted an updated settlement arrangement offer under which Xfone will adopt the sharing agreement which was signed between the Company and the Potential Buyer) and the Company, regarding the network sharing agreement which was signed between the Company and the Potential Buyer and the repayment of the full debts to Xfone's creditors. The arrangement manager further noted that in the absence of such agreements and in light of the end of the period defined in the Insolvency and Financial Rehabilitation Law, 2018 (the "Law") for the proceeding, the alternative to such creditors' settlement arrangement would be an order to open insolvency proceedings against Xfone under Part B of the Law.

The Company has reservations regarding the arrangement manager's position and will present them to the court. The hearing in the insolvency court has been postponed to October 7, 2021. The Company will further update on material developments.

About Cellcom Israel

Cellcom Israel Ltd., established in 1994, is a leading Israeli communications group, providing a wide range of communications services. Cellcom Israel is the largest Israeli cellular provider, providing its cellular subscribers with a broad range of services including cellular telephony, roaming services, text and multimedia messaging, advanced cellular and data services and other value-added services in the areas of mobile office, data protection etc., based on Cellcom Israel's technologically advanced infrastructure. The Company operates advanced networks enabling high-speed broadband and advanced multimedia services. Cellcom Israel offers nationwide customer service including telephone customer service, retail stores, and service and sale centers. Cellcom Israel further provides OTT TV services, internet infrastructure and connectivity services and international calling services, as well as landline telephone services in Israel.

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