Nofar brings Altshuler Shaham into Megalim solar plant deal


Altshuler Shaham will buy 45% of the thermo-solar energy plant in the NIS 580 million deal with the Noy Fund.

Investment house Altshuler Shaham has joined the deal in which renewable energy company OY Nofar Energy (TASE: NOFR), controlled by its chairperson Ofer Yannay, is buying 100% of the rights of the Noy Fund and its partners in the Megalim thermo-solar energy project at Ashelim in the south of Israel, for NIS 580 million. The final deal price is subject to the results of a due diligence examination by Nofar.

Under the memorandum of understanding signed by the parties, Altshuler Shaham (through the provident and pension funds that it manages) will hold 45% of the solar energy plant, and Nofar Energy will hold the remaining 55%. Nofar is acting to bring other financial institutions into the deal.

The Megalim project is one of the main investments of the Noy Fund, which was raised in 2011 and is reaching the end of the process of realizing its assets. As far as is known, the sale of its holding in the Megalim project will yield a profit of some kind to the fund. Mainly it will relieve it of a debt of some NIS 2 billion that the project carries.

Nofar states that the price in its MOU with the Noy Fund is based on the fund's estimate of the free cash flow from the Megalim power plant until the end of the concession period, capitalized at a rate of 8.5%, and that it will verify the reasonableness of these assumptions and the feasibility of actions to create further upside in the course of its due diligence examination.

Eyebrows were raised on the capital market after the acquisition deal was reported. This was partly because of the debt with which the project is saddled, and partly because of the connection between Nofar and the Noy Fund - the fund owns 20% of Nofar. The current deal with them is not defined as a party at interest deal, which would require approval by a majority of the minority interest shareholders in Nofar.

Published by Globes, Israel business news - - on July 21, 2021

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