Israel Infrastructure Fund Completes 150% Exit in Dalia Power Energies

October 17, 2015 | The Marker

Electrifying Yield – Israel Infrastructure Fund sold preferred shares in private power plant – Dalia Power Energies – for NIS 250 Million – recording a gain of 150% in three years.

The Fund, which specializes in infrastructure project investments, sold preferred shares in Dalia Power Energies to a group of institutional investors led by Amitim for NIS 250 million – three years after acquiring them for NIS 100 million. Dalia Power Energies is the largest private power plant in Israel, which supplies 7% of electricity in the State of Israel

Israel Infrastructure Fund managed by Yaron Kestenbaum, in recent weeks sold its stake in the preferred shares of the largest private power plant in Israel, Dalia Power Energies, to a group of institutional investors led by Amitim Senior Pension Funds.  The Dalia Power Energies power plant is located at the Tzafit site near the Re’em Junction (Masmiya).  It supplies 870 megawatts – 7% of Israel’s electricity consumption, having commenced operations in July 2015.

The plant, operating with combined cycle technology using natural gas it purchases from Tamar, was built at a cost of NIS 3.5 billion, financed by a group of banks headed by Bank Leumi (NIS 2.7 billion) and by the equity of the project’s shareholders.  Half of the project’s equity was raised in an issuance of preferred shares, which conferred rights in equity, as well as preference in dividend distributions.  These shares constitute a quasi-loan that bears annual interest of 11%-13%.

Israel Infrastructure Fund, which also owns 20% of the Dalia Power Energies shares, purchased the preferred shares for NIS 100 million in 2012.  Israel Infrastructure Fund sold these shares several weeks ago to a group of institutional investors led by Amitim Senior Pension Funds for NIS 250 million.  Hence, the investment in the preferred shares generated a return to the Fund of 150%, reflecting an annual return of 44%.  Israel Infrastructure will continue to hold 20% in the shares of Dalia Power Energies, together with Mishkey Hakibbutzim Group (47.7%); Sigma Epsilon founded Dr. Eli Barnea, Moshe Lassri and Yigal Porat (25.6%); and SE Energy (6.7%).

The current transaction is an additional realization by Israel Infrastructure Fund, owned by the Harel Insurance Company, Attorney Dr. Yehuda Raveh and Yaron Kestenbaum.  The Fund sold 3% of the shares of Highway 6 to Clal for NIS 135 million in January 2015.  The transaction reflected an operational value for Highway 6 of NIS 4 billion and a 100% return on the investment in the Highway made by Israel Infrastructure Fund in 2010.  The Fund and Shikun & Binui acquired their holdings in the Highway from Africa Israel Investments.

Israel Infrastructure Fund also owns shares in Hayovel Lines Ltd., the operator of Highway 431; 30% of the shares of CityPass, operator of the Jerusalem Light Rail; 16% of the shares of Swissport, operator of a cargo terminal in Ben Gurion Airport; and wholly owns Via Maris, the operator of a desalination plant for the treatment annually of 90 million cubic meters of water at the Palmahim Site.

 


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