Gilat Announces $104M equity increase through Completion of Exchange Offer and 2003 Third-quarter Results

Reports Quarterly Revenues of US$44.6 Million

StarBand Communications Inc. Receives Court Approval for Plan of Reorganization

Petah Tikva, Israel, November 13, 2003 – Gilat Satellite Networks Ltd. (Nasdaq: GILTF), a worldwide leader in satellite networking technology, today announced the final results of its offer to exchange its Ordinary Shares, par value NIS 0.20 per share, for its outstanding 4% Convertible Subordinated Notes due 2012 (the “Notes”). At the expiration of the offer on November 10, 2003, at 5:00 p.m., New York City time, US$74,381,667 principal amount of Notes, representing about 84% of the total Notes, had been validly tendered, and not properly withdrawn, in the offer. Gilat has accepted all such notes, except to the extent that the final tally shows that the tender would cause a single Noteholder to own 20% or more of the Company’s ordinary shares. The Company will not accept the tendered notes to that extent and will return only those notes to the holder. Gilat offered 125 of its Ordinary Shares for each $1,000 principal amount of the Notes and accrued interest thereon.

The Company also reported its results for the quarter-ended September 30, 2003. Revenues were US$44.6 million for the third quarter of 2003, an increase of US$1.3 million over the US$43.3 million result for the same period in 2002. Net loss for the third quarter was US$4.2 million or US$0.32 per share. The 2003 third-quarter net loss include a total of US$0.8 million other income, US$4.5 million gain from restructuring of debt and US$1.7 million charges relating to the company’s restructuring process .The 2002 third-quarter net loss was US$108.4 million or US$91.58 per share which included write-offs associated with a partial impairment of GVT notes, inventory adjustment related to current sales level, adjustment for doubtful accounts, final costs associated with the closing of the rStar transaction, and certain transponder termination costs associated with StarBand Communications.

The total cash and cash equivalents during the quarter decreased by US$4.8 million from US$44.9 million to US$40.1.

This conversion significantly reduced the Company’s debt and the related accrued interest by US$104 million bringing Gilat’s shareholders’ equity (deficiency) as of September 30, 2003 on a pro forma basis to US$97 million from (US$7) million, assuming no Noteholder will own 20% or more of the Company’s ordinary shares. In the event that a single Noteholder will own 20% or more, the increase in shareholders’ equity (deficiency) will be lower.

The successful completion of the offer results in a significant improvement in Gilat’s balance sheet, increased shareholders’ equity, reduced debt and improved financial ratios.

Former Noteholders of Gilat may direct questions concerning the closing of the offer to Gilat Satellite Networks Ltd. General Counsel, Telephone: +972-3-925-2736.

StarBand Communications Inc. Cleared by Courts to Exit Chapter 11 Protection
The Company also announced that StarBand Communications Inc. received approval from the U.S. Bankruptcy Court in Delaware to emerge from Chapter 11 protection. This is the final clearance required from the bankruptcy court for StarBand to implement its reorganization plan. The effective date of the emergence should occur by the end of November. The company filed for Chapter 11 bankruptcy protection on May 31, 2002 following a major dispute with a strategic partner. Through settlement of this dispute, renegotiations of key contracts, reductions in staffing offset by increased automation, creation of a new sales force and continued addition of new customers, StarBand is poised to emerge a more financially stable company. As part of the reorganization, StarBand and Gilat have also entered into a new technology and hardware supply agreement including up to $7.5 million in additional financing. Post reorganization, Gilat will hold approximately 49% equity in StarBand.

In addition, Gilat announced that Mr. Pinchas Buchris has been elected to the Board of Directors, in place of Mr. Meir Shamir, who has resigned from the Board. Mr Buchris, a former senior IDF intelligence officer, is a Venture Partner of Apax Israel, and acts as a special advisor for technology start-ups and other companies.

The Company announced the formation of a central and global executive team to oversee worldwide operations in order to maximize synergies, cooperation and efficiencies by Gilat and its subsidiaries and offices around the globe. During the quarter, the Company also appointed Avihu Bergman as an Executive Vice President for Sales, a new position in Gilat. Avihu Bergman joined the Company in September and is directly responsible for sales in Africa, Asia, Australia and Europe as well as worldwide coordination of the Company’s sales efforts including North and Latin America.