Significant Exit for IIF: Sells 20% of Dalia Energies for NIS 430M

July 31, 2016 | TheMarker

Israel Infrastructure Fund executes a significant exit on its investment in Dalia Energies (20%).  IIF, managed by Yaron Kestenbaum, who is also the general partner of the Fund, controlled by the insurance and finance group Harel Investments owned by Yair Hamburger, and Attorney Yehuda Raveh, is selling its holdings in Dalia Energies and the future projects to be built by Dalia Energies for NIS 430 million.  This represents an eight-fold gain on the equity invested since 2007.  The sale is based on a value of NIS 2.2 billion for Dalia Energies.  The buyers ultimately received a discount below the price discussed at the start of negotiations.

The buyer of the holdings in Dalia Energies is a group that includes the Mexican Jewish entrepreneur Daniel Jusidman, businessman Swi Barak, the Continuing Education Fund for Teachers and Kindergarten Teachers, and the Continuing Education Funds of High School Teachers, owned by the Teachers Labor Federation and the State of Israel.   The buyers are essentially acquiring holdings in an existing asset, which creates fixed cash flows for a prolonged time period, generating a higher yield than that generated by other investments during a low interest period.

Dalia Energies, run by Eitan Meir, has built the largest private electricity-producing power plant in Israel, located at the Tzafit site in the Judea Plain, adjacent to Kfar Menahem.  The plant has a 900 MW maximum capacity.  Aside from IIF, the other shareholders in Dalia Energies are the Mishkei Hakibbutzim – Agricultural Cooperative Society Ltd. (47.7%), Hiram Epsilon, owned by Dr. Eli Barnea, Moshe Lassri and Yigal Porat (25.6%) and S.E. Int-Energ Group Ltd. (6.7%).

Several months ago, IIF sold the preferred shares it had held in Dalia Energies to a group of investors led by Amitim Pension Funds, in consideration for NIS 250 million.  This sale yielded a return on investment of 150%.

Recently, IIF sold its stake in CityPass, the concessionaire of the Jerusalem Light Railway, to the Teachers Funds, at a five-fold gain on its investment.  At the beginning of the year, IIF closed a successful exit of 150%, when it sold the preferred shares it had held in the Dalia Energies private power plant to a group of investors led by Amitim, in consideration for NIS 250 million.  The shares were acquired approx. three years earlier for NIS 100 million.

Last year, IIF sold 3% of its direct holdings in Highway 6 to Clal Insurance for NIS 135 million.  The sale reflected an operational value for Highway 6 of NIS 4 billion and a return of 100% on IIF’s investment in Highway 6 made at the end of 2010.  Previously, IIF had sold a mezzanine loan in Highway 6 to Migdal at a 200% gain on its investment.


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