The privatization of Haifa Port is being delayed. The consortium of Gadot Chemical Terminals (1985) Ltd. (TASE: GDTR) and including Indian company Adani Ports and Special Economic Zone Ltd (APSEZ)., which won the tender to buy the shares of government-owned Haifa Port Ltd. for NIS 4.1 billion has requested an extension in the deadline to transfer the money to the state. According to the consortium, the required delay in making the payment is due to the negotiations being conducted with financing bodies in Israel and abroad in what is a complex deal in both financial and regulatory terms.
The bid submitted by the consortium was NIS 1 billion higher than rival bids and sources in the industry believe that the consortium erred in its pricing calculations, even though the deal includes real estate projects and the port has NIS 1 billion in its coffers for various investments.
In any event, the state does not expect any dramatic developments because it is reasonable that such a large amount requires many meetings and contracts with several financing bodies.
India's Adani Group, which won the tender with Gadot, controlled by Tena and Value Base, plans financing 75% of the deal through loans from a consortium of banks and the Israel capital market, according to a presentation to investors published in August in India by APSEZ.
Adani expects to invest NIS 975 million of its own money with the remaining NIS 2.925 billion from raising debt. In its presentation, Adani estimates that it will take 25 years to repay the loans, which will be carried out through dividends and funds from operational profits from Haifa Port.
According to the presentation, the average annual return on equity that will be invested in APSEZ in the deal will be about 90% over the next 10 years. From the presentation, it is clear that APSEZ attributes major importance to the rise in value of the port's commercial real estate, which includes a plan for hotels and commercial properties in the seafront area that are subject to approval.
Gadot said, "The request is only technical due to August and the holidays. The work for completing the deal is underway and progressing well but the process takes time like any project and large infrastructures tenders."
Published by Globes, Israel business news - en.globes.co.il - on September 6, 2022.
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