Israel Corporation (TASE: ILCO) wholly-owned subsidiary Inkia Energy Ltd. has sold 25.1% of Peruvian subsidiary Kallpa Generacion SA for $55 million to Quimpac Corporation SAC. Quimpac is a private company owned by an unnamed investor. The deal gives Kallpa a company value of $220 million. Israel Corp. will report a capital gain of $34 million on the sale in the fourth quarter of 2009.
Kallpa operates two turbines at its Central Termica power plant south of Lima, with a capacity of 374 Megawatts, and a is building a third 192-megawatt unit at the site. Kallpa will use the proceeds to boost output by 280 megawatts, boosting total generating capacity to 850 megawatts.
Ofer Holdings Group subsidiary Israel Corp. is currently in negotiations with creditors on a $3.5 billion debt arrangement for wholly-owned subsidiary Zim Integrated Shipping Services Ltd.. The settlement will include a capital injection of almost $600 million in Zim by the company. Zim's bondholders will receive extra interest payments in return for agreeing to postponing the bonds' maturity.
Clal Finance analyst Yuval Ben-Zeev said, "A settlement will lift the dark cloud over Israel Corp. and it will again be valued on the basis of its net asset value (NAV)." He estimates the company's NAV at NIS 3,640 per share, and set a target price of NIS 2,900 per share, 20% less than the NAV, although above yesterday's closing price of NIS 2,669. "Bottom line, the pending debt settlement should reduce the discount on Israel Corp.'s share," he concluded.
Israel Corp.'s share rose 1.8% in early trading today to NIS 2,717.
Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2009
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