OPC Energy Ltd. (TASE: OPCE), controlled by Idan Ofer's Kenon Holdings Ltd. (NYSE: KEN; TASE: KEN), is raising NIS 120 million from three investment institutions in a private placement. OPC, listed on the Tel Aviv Stock Exchange (TASE) at a NIS 3.2 billion market cap, reported yesterday that it was allocating 3.8% of its share capital (following the allocation) to insurance company Migdal and two other financial institutions at NIS 23.17 per share, the share's closing price on Sunday, but a 5% discount on yesterday's market price.
Migdal will invest NIS 46 million for 1.4% of OPC's share capital, giving it a 9% stake in the company following the allocation. Another institution will invest NIS 50 million for 1.6% of OPC's share capital, and the third institution will invest NIS 24 million for 0.8%. The allocation will leave Kenon with 73% of OPC's share capital. OPC said, "The company will use the proceeds for its business activity in accordance with the decisions of the company's board of directors from time to time."
OPC is currently in advanced negotiations to acquire the 20% stake of Veridis in OPC Energy Rotem, which operates a 466-megawatt power station at Mishor Rotem, and in AGS Rotem. OPC holds all the other shares in OPC Energy Roten and AGC Rotem, and stands to acquire full ownership of the two companies for NIS 480 million. AGS Rotem does development work in OPC's fields of activity, among other things promotion of a plan for expanding the Mishor Rotem power plant.
This deal will take place through an allocation of 13% of OPC's share capital to Veridis at NIS 23.17 per share, the same price at yesterday's deal was conducted. As part of the emerging deal, Veridis will acquire 7% more of OPC's share capital at a share price to be agreed, thereby raising Veridis's stake in OPC to 20%.
Building power stations in Kiryat Gat and Hadera
At the same time, OPC is currently moving ahead with plans to construct a large power station near the Plugot Junction (Kiryat Gat) that will supply 396 megawatts. Construction will be through Zomet Energy, in which OPC has a 95% holding. The company is preparing to build a flexible natural gas power station. The need for such flexible stations is increasing as the electrical system switches to production of renewable energies. The projected inauguration of the power station is in 2022. The company is also currently building another power station in Hadera with a 148-megawatt capacity.
OPC's August 2017 IPO was one of that year's most successful offerings. The share price has climbed 104% since then. The company finished the first quarter of 2019 with NIS 353 million in revenue, 1% more than in the corresponding quarter last year. OPC's net profit in the first quarter was NIS 40 million, down 10%, compared with the first quarter of 2018.
Published by Globes, Israel business news - en.globes.co.il - on June 4, 2019
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