At the end of last week, Delek Israel, a unit of Delek Group Ltd. (TASE: DLEKG), which is controlled by Yitzhak Tshuva, signed two deals for sales of assets totaling NIS 1.1 billion. Completion of the deals should pave the way to the sale of Delek Israel itself, which will be left with its main activity of operating fuel stations and convenience stores.
In the first deal, Delek Israel sold all of its rights in the Delek Pi Glilot partnership for NIS 720 million to building contractor Yehiel Abu. Delek Pi Glilot owns land for storing gasoline including 90 acres in Jerusalem, 82.5 acres in Ashdod, 7.75 acres in Haifa and 27 acres in Beersheva.
Under an MOU signed last month, Pi Glilot will continue to provide Delek Israel with services at the terminals at Ashdod, Beersheva amd Haifa for ten years, with an option for a five-year extension, subject to minimum revenue from each terminal.
In the second deal, Delek Israel signed an MOU for the sale of two special vehicle companies that own the power plants at the Soreq and Ashkelon desalination plants for NIS 367.5 million to Rapac Energy . NIS 307.5 million will be paid when the deal is completed and NIS 60 million one year later.
The sale of Delek Israel is extremely important to Delek Group in order for it to be able to repay its bank debt and meet its obligations to its bondholders. Delek Group recently estimated that the sale of Delek Israel and other assets would raise NIS 1.5 billion this year. It has already signed a deal for the sale of super-royalties on the Karish and Tanin offshore natural gas reservoirs for NIS 300 million.
Published by Globes, Israel business news - en.globes.co.il - on June 7, 2020
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