A subsidiary of Tahal Group International BV, controlled by Kardan NV (TASE: KRNV;AEX:KARD), together with ZRB, its partner for its business in Africa, has signed agreements with an Angolan government company to develop and construct three agricultural development projects there. The agreements, which total $291 million, were signed on Tuesday, and Tahal will receive half of this amount, the company reported yesterday to the TASE.
The projects which depend on the availability of financing, are slated to take 32 months. Payment will be quarterly, depending on the achievement of milestones.
Each project involves the development of a regional agricultural center, including the planning and construction of a number of farms, crops areas with drip irrigation, net houses and greenhouses, chicken coops and incubators, a logistical center, and a training center.
Kardan NV's share price responded to the report with a 16% leap, bringing its gains this week to 30% and pushing the company's market cap up to NIS 71 million.
Early this week, Kardan NV reported that Tahal, together with ZRB, had signed an agreement with the Zambian government to design and build an agricultural and water project in the country. The price for the three-year project is estimated at NIS 640 million ($176 million), to be divided equally by Tahal and ZRB.
Once financing is obtained for these four projects, Tahal's orders backlog will rise to nearly NIS 4 billion.
Managed by president and CEO Saar Bracha, Tahal provides engineering, planning, and supervisory services for water pump and supply projects, and is also involved in carrying out and building such projects. The company's specialties include water and sewage treatment, desalination, environmental and civil engineering, putting waste in landfills, natural gas, and agriculture.
Kardan NV has three main assets: full ownership of Kardan Land China (KLC), a real estate company operating in China; a 98.4% stake in Tahal; and a 66% stake in the holder of the Ukrainian franchise for the Avis car brand (Iny family company Universal Motors Israel - UMI owns the other 34%).
Kardan NV has been conducting a sale procedure for Tahal in recent months in order to meet its obligations to its bondholders. It was reported in July that Chinese companies had made at least two binding purchase offers for Tahal at prices in excess of €120 million.
Last month, economists from the S&P rating company retained their B rating for Kardan NV's bonds, but warned, "If the company does not reach a final binding agreement to sell the asset within three months and does not find another way to raise capital to cover its uses for 2018, we will downgrade the rating by a number of levels."
Published by Globes [online], Israel Business News - www.globes-online.com - on August 24, 2017
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