The tenders committee of Israel Electric Corporation (IEC) held a first meeting today with Dalia Energy Companies, which won the tender to buy the Eshkol power station in Ashdod with a bid of NIS 12.4 billion.
The Dalia Energy representatives made clear to IEC that the company would find it very hard to finance the existing bid, because of the very large gap between it and the second bid, which was NIS 7 billion by OPC and the Noy Fund. They explained that the power station was worth more than that bid, because of its real estate potential and the construction of the Eshkol 2 power plant on the site, and made a revised offer lower than the original one but still substantially higher than the OPC-Noy bid. Dalia Energy presented proof that it would be able to finance this lower offer, with backing both from the capital market and from its owners.
The ball is now in IEC’s court. Its internal valuation of the Eshkol power station was NIS 5.8-6.2 billion, lower even than the OPC-Noy bid.
Under the rules of the tender, if Dalia Energy wishes to continue the process of buying the power station, it has to put up an additional guarantee of NIS 100 million by June 29, or else its first NIS 100 million guarantee will be forfeit, and the tender will be awarded to OPC-Noy, which stated last week that it was ready to invest the resources required to complete the purchase, and to post a NIS 200 million guarantee within the time set in the tender rules.
Published by Globes, Israel business news - en.globes.co.il - on June 25, 2023.