Israel Corp in talks on Rotem power plant stake

Israel Corp. (TASE: ILCO) is taking a further step to expand its activity in private electricity production in Israel, through a party-at-interest deal with its parent company Ofer Brothers, through Ofer (Energy Holdings) Ltd.

The company said today that it was mulling the acquisition of 80% of Ofer (Power Stations) Ltd. (OPC), which is said to have reached an agreement to sell Israel Electric Corporation (IEC) electricity produced by the Mishor Rotem power plant in the Negev.

The Ministry of Finance recently reconfirmed OPC as the winner of the government tender and the High Court of Justice is due to make the agreement between the two sides legally binding.

Israel Corp also said that the company's board and audit committee have authorized management to conduct a due diligence review of OPC and the project, and begin negotiations with Ofer Energy on the acquisition of a stake.

Ofer Energy is also in talks with Veolia Environment SA (NYSE: VE; Euronext: VIE) subsidiary Dalkia Israel on a partnership in the project. Dalkia will reportedly operate the power plant at Mishor Rotem and hold a 20% share of the project. Israel Corp is also expected to bid for the tender to build a solar power plant at Ashelim. At the same time, it is in talks with IEC on collaborating with it in the building of the Ramat Hovav power plant in Israel and other projects overseas.

The Mishor Rotem power plant is due to come online by 2012, and will supply electricity to the national grid at a fixed tariff.

Published by Globes [online], Israel business news - www.globes-online.com - on June 30, 2008

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