Delek Group Ltd. (TASE:DLEKG) unit NewMed Energy (TASE: NWMD) (formerly Delek Drilling) is listing on the London Stock Exchange through a reverse merger with UK company Capricorn Energy plc, which is already publicly traded there. The move comes after NewMed Energy has spent the past 18 months attempting to undertake a complex legal procedure, which would change it from a limited partnership to a limited company, for the purposes of an initial public offering (IPO) in London.
NewMed Energy holds rights to 45% of the Leviathan Israeli offshore gas field as well as the Aphrodite gas field in Cyprus's economic waters. After the completion of the merger, NewMed Energy CEO Yossi Abu, will lead the merged company, which will be called NewMed Energy.
As part of the merger agreement, shortly before the completion of the deal, Capricorn will distribute to its shareholders a special dividend in cash and related payments, amounting to $620 million dollars. Capricorn will then offer 2.337344 new shares for every NewMed participation unit held.
Under this ratio, the owners of the existing units of New-Med will hold 89.7% of the shares of the consolidated company, while the shareholders of Capricorn will hold the remaining 10.3%. Thus, the partnership will become a private corporation fully owned by Capricorn.
The shares of the combined company are expected to be listed for trading on the premium list on the London Stock Exchange under the name New-Med Energy, and will also be dual listed for trading on the Tel Aviv Stock Exchange. Completion of the transaction is subject to a number of conditions, including the approval of the New-Med participation unit holders' meeting as well as approval by the Jerusalem District Court, where the procedures for turning the partnership into a public company are taking place.
Abu said, "The merger with Capricorn creates the leading energy company in the Mediterranean region, while producing significant benefit for the shareholders of both companies. This is a merger that creates a prominent, leading and significant energy company that will be traded in London and Tel Aviv, with 2P reserves of more than 1.5 billion barrels of oil equivalent, most of which is natural gas first and foremost from the giant Leviathan reservoir, with low production costs and stable cash flow. The high and stable flows will allow the merged company to generate a return for investors with significant growth potential.
"We share with Capricorn a common vision and a strategic plan to double our production by 2030, from organic opportunities, with exposure to the LNG (liquefied natural gas) market and with the aim of contributing to the supply of natural gas to European markets. The merger will play a central role in the transition of energy and bringing attractive value to our shareholders."
Capricorn CEO Simon Thomson added, "The deal produces an immediate and significant capital return for our shareholders, in addition to continued ownership of a unique company that is traded in England, and is correctly positioned for the future of the energy industry. The merged operation will offer investors a large natural gas company, with a stable capital return policy and solid environmental and corporate standards, serving the energy-thirsty Middle East and European markets."
Published by Globes, Israel business news - en.globes.co.il - on September 29, 2022.
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