Israel Corporation (TASE: ILCO) will acquire 80% of OPC Rotem Ltd. from Ofer (Energy Holdings) Ltd., a private company owned by Israel Corp.'s controlling shareholder Ofer Holdings Group. OPC Rotem is a private power company that is planning to build a power station at Mishor Rotem.
The deal is the latest sale by Ofer Holdings to its public subsidiaries, following the sale of the company's shipping and real estate interests.
"Globes" first reported on the OPC deal a year ago. Israel Corp. will receive the OPC shares at no cost, but will assume the company's owners' loan of NIS 15.5-16.5 million. The Consumer Price Index (CPI) linked loan bears 4% annual interest.
The cost of the planned Mishor Rotem power station is estimated at $300-400 million, of which OPC is due to put up 20% from shareholders' equity. This means that Israel Corp. will inject about $50 million in the project.
In 2003, OPC won the tender to build and operate the 30-megawatt natural gas-driven Mishor Rotem power station. The power station is due to come on line in 2013 and will sell the electricity to the national grid, i.e. Israel Electric Corporation (IEC) (TASE: ELEC.B22).
In a separate deal, Veolia Environment SA (NYSE: VE; Euronext: VIE) subsidiary Dalkia Energy & Systems Ltd. is due to acquire the other 20% stake in OPC from Siemens AG (NYSE: SI; XETRA: SIE).
Israel Corp,'s share fell 4.6% today to NIS 2,230.
Published by Globes [online], Israel business news - www.globes-online.com - on September 21, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009