Following the sale of one-third of its stake in CityPass to the Teachers’ Continuing Education Funds, IIF will hold 20% of the Concessionaire

Israel Infrastructure Fund (IIF) signed an agreement for the sale of 10% of CityPass, concessionaire of the Jerusalem Light Railway, at a company value of NIS 700 million.  Under the terms of the agreement, the closing of which is contingent on obtaining approval from the banks, the State of Israel and the Anti-Trust Commissioner, the Teachers’ Continuing Education Funds will pay NIS 70 million for the shares.

The existing shareholders of CityPass have a right of first refusal for the shares now being sold to the Teachers’ Continuing Education Funds, but expectations are that they will not be invoked.  Therefore, the sale is expected to close in several weeks, and then IIF will have realized about one-third of its stake in the Jerusalem Light Railway Concession.

Following the closing of the sale, IIF, run by Yaron Kestenbaum, will hold 20% of the shares in the Jerusalem Light Railway Concessionaire – CityPass, while its stake in the Jerusalem Light Railway Operating Company – Connect – remains unchanged.

Thus, following the closing of the sale between the Teachers’ Continuing Education Funds and IIF, CityPass will be owned by Ashtrom (50%), Harel (20%), IIF (20%) and the Teachers’ Continuing Education Funds (10%).  The shares in the Connect operating company are held as follows: 50% by the Ashtrom Group, 30% by IIF, and the balance of 20% by Harel.

IIF, which was established by the Harel Insurance Group, Attorney Yehuda Raveh and Yaron Kestenbaum, is engaged in the infrastructure, energy and transportations industries, with $1.1 billion under management.  Assets include: Highway 6, Hayovel – Highway 431, Milgam Municipal Services, Derech Hayam – Desalination Plant in Palmahim, Swissport – Cargo Terminal in Ben Gurion Airport, a telecom and wind farm overseas, and Dalia Power Energies.

Chairman of the Teachers’ Continuing Education Funds is Eyal Gabbai, and the CEO is Pesach Landsberg.  The funds, under the control of the Histadrut Teachers Union and the Ministry of Education, manage NIS 18 billion.  This is not the first non-financial transaction for these funds, which already hold stakes in Highway 431, the Dalia Power Plant, Trans-Israel Highway and others.