Dalia doubles down on Eshkol power station bid

Eshkol Power Station  credit: Yossi Weiss, Israel Electric Corporation
Eshkol Power Station credit: Yossi Weiss, Israel Electric Corporation

Dalia Energy Companies has raised its performance guarantee from NIS 100 million to NIS 200 million, which it is in danger of losing if IEC rejects its revised offer.

Dalia Energy Companies (TASE: DALIA) announced this morning that, in accordance with the terms of the tender, it had increased the guarantee supporting its winning bid for the Eshkol power station from NIS 100 million to NIS 200 million. Dalia has however submitted a revised offer of NIS 9 billion, instead of its original bid of NIS 12.4 billion, which was far in excess of Israel Electric Corporation’s (IEC) internal estimate of the power station’s value, and much higher than the next highest bid in the tender, which is seen making it difficult for the company to raise finance for the purchase.

The future of the tender now depends on a decision by IEC whether to accept Dalia’s revised offer, which will lead to an appeal by the under-bidder, the OPC-Noy Fund consortium, to the High Court of Justice; to award the tender to OPC-Noy and foreclose on the NIS 200 million guarantee deposited by Dalia; or to cancel the tender.

For the purposes of guaranteeing that it will meet the preconditions for handover of the power station, in the event that a sale agreement is signed between the parties on the basis of the revised offer, Dalia deposited a further NIS 700 million.

Dalia says that its revised offer is valid until the earlier of sixty days from the handover date specified in the tender, the date IEC cancels the tender, and the date IEC announces that it is rejecting the revised offer.

Dalia has given its financing banks collateral against the guarantees that they have set up, including deposits at the banks. The deposits are from the company’s own resources and from shareholders’ loans amounting to NIS 142.5 million.

The Eshkol power station, which is fueled by natural gas, has an installed capacity of 1,693 megawatts, about 9.5% of the current combined capacity of Israel’s power stations. There is also a regulatory commitment to the construction of Eshkol 2, a new, 850-megawatt power plant, on the site. The site covers 440 dunams (110 acres), allowing substantial construction of, for example, energy storage installations.

Before the tender, IEC’s internal estimate put the value of the Eshkol power station at NIS 5.8-6.2 billion. At NIS 6 billion, the Generation Capital-Mivtach Shamir-Ashtrom consortium’s bid was within this range. The OPC-Noy Fund bid was NIS 7 billion. Both Dalia Energy Companies’ original bid of NIS 12.4 billion and its revised bid of NIS 9 billion are well above the range.

It is estimated that, of the amount that the eventual buyer will pay, NIS 3-3.5 billion will go to IEC, while the remainder will be transferred to the public through a reduction in electricity prices. This means that, if the tender is awarded to OPC-Noy Fund, about NIS 4 billion will be available to finance a reduction in electricity prices, enough to bring prices down by 3% for four years. If Dalia Energy Companies’ revised offer is accepted, this will leave about NIS 6 billion to be applied to reducing electricity prices, enough for a 3% reduction for six years.

The Eshkol power station in Ashdod is the fourth, and most expensive, of the power stations that IEC was due to sell in the framework of the power industry reform.

Published by Globes, Israel business news - en.globes.co.il - on July 10, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Eshkol Power Station  credit: Yossi Weiss, Israel Electric Corporation
Eshkol Power Station credit: Yossi Weiss, Israel Electric Corporation
Yitzhak Tshuva credit: Gidon Levy and Tali Bogdanovsky Isracard shareholders approve acquisition by Delek

For the deal to go through, approval is now needed from the Supervisor of Banks and the Israel Competition Authority.

Air Canada Photo: Shutterstock Air Canada to resume Israel flights in June

The Canadian airline will resume Toronto-Tel Aviv flights on June 8 and Montreal-Tel Aviv flights in August.

NICE CEO Scott Russell credit: SAP NICE Systems falls sharply on disappointing 2025 guidance

NICE sees $693-703 million revenue in the first quarter of 2025, up 6% from the corresponding quarter of 2024, with non-GAAP earnings per share of $2.78-2.88 - 3.8% below the analysts' consensus for revenue and 2.4% below for profit.

Tel Aviv credit: Shutterstock Urban renewal plan approved in heart of Tel Aviv

The plan for the Hahashmal neighborhood opposite the Old Central Bus Station includes a 30-floor tower.

Smartshooter credit: Smartshooter Germany buys Kibbutz Yagur's Smartshooter AI sights

The product family includes systems mounted on personal rifles, remotely controlled systems, and systems carried by vehicles, robots, and even drones.

Chinese ship in Suez Canal credit: Suez Canal Authority Direct shipping to Israel could resume soon

The first shipments of vehicles are likely to reach Israel via the Suez Canal in the coming months.

Sde Dov credit: Guy Yehieli Sde Dov land prices down over 40%

Four huge tenders for almost 4,000 homes, which have been successfully marketed in the north Tel Aviv district, reflect prices over 40% lower than in 2022.

Wix president Nir Zohar credit: Alan Tzatzkin Wix provides cautious 2025 guidance after strong 2024

The Israeli website building platform company reported its first-ever GAAP operating profit in 2024.

Saar Yoskovitz and Gal Shaul  / Photo: Augury Israeli industrial AI co Augury raises $75m

The new round represents an increase in valuation for Augury, which maintains its position as a ‘unicorn’ startup.

Eitan Yochananof and Eyal Ravid credit: Eyal Izhar and Tali Bogdanovsky Regulator indicts Victory, Yochananof CEOs over price fixing

The Israel Competition Authority today issued first indictments, following the food price fixing investigation.

Shekel credit: Shutterstock Vladirina 32 Shekel gains continue as Gaza talks progress

The shekel continues to trade at its strongest levels against the dollar since early 2023.

New York credit: Shutterstock Tel Aviv - New York fares stay high despite US airlines return

Ticket prices to the US will continue to cost at least $1,200 return, according to Ophir Tours, with most fares ranging between $1,500 and $2,000, or even more.

Greenfield Partners team credit: Eyal Toueg Greenfield Partners closes $400m third fund

The funds were raised from institutional investors in Israel, the US, Europe and Asia and brings the total funds under management to more than $1 billion.

Blockaid founders Ido Ben-Natan and Raz Niv credit: Liron Weissman Israeli onchain security co Blockaid raises $50m

Blockaid protects the largest companies building onchain, including Coinbase, Metamask, Stellar, Uniswap, and World App.

Air Haifa  credit: ATR Air Haifa to launch Paphos flights

New Israeli airline Air Haifa will launch a new route between Haifa and Paphos in Cyprus on April 3, 2025 with six weekly flights.

Bladeranger Deepsolar credit: PR Bladeranger divests Deepsolar to Painreform in strategic move

Deepsolar, acquired by Bladeranger in early 2023, is a sophisticated software solution designed to optimize the management of photovoltaic solar energy fields.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018