Israel Electric Corporation (IEC) will ask the government to postpone the deadline for privatizing power plants, part of the planned reform of the corporation, "Globes" has learned.
At a closed meeting that took place recently, attended by IEC chairman Moti Friedman, IEC's management put forward the view that spinning off the production segment would be much more complicated than previously thought, and would require a change to the timetable for the reform.
Spinning off IEC's power plants into between four and six subsidiaries is a central part of the reform plan. In previous discussions between the corporation, the state, and the workers, it was decided that spinning off the production segment into subsidiaries and floating the subsidiaries on the stock exchange (up to 49% of the shares) would be completed if possible by 2014-2015. However, IEC estimates that this timetable is not realistic.
The IEC believes that, before privatization, the production division will need to undergo comprehensive restructuring, and that turning power plants into independent profit centers will take at least until 2014-2015. Only after that will it be possible to form the subsidiary companies.
IEC has already presented its position to the government informally. The Ministry of Finance and the Ministry of National Infrastructures see it as merely an opening stance for negotiations.
Published by Globes [online], Israel business news - www.globes.co.il - on July 20, 2009
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