Treasury accepts Noy Fund's bid for Road 6

Finance Ministry: Derech Eretz shareholders failed to properly exercise their first refusal rights to the government's rights to Road 6's franchisee.

The Ministry of Finance last night announced that it has accepted the bid of the Noy Infrastructures and Energy Fund to acquire 49% of the government's rights in Road 6 (Cross Israel Highway or Yitzhak Rabin Highway) franchisee Derech Eretz Highways Ltd. The decision was made after the ministry ruled that the franchisee's current shareholders failed to properly exercise their first refusal rights.

Noy Fund is owned by Bank Hapoalim (TASE: POLI) unit Poalim Capital Markets - Investment Bank Ltd. and IDB Holding Corp. Ltd. (TASE:IDBH) unit Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS).

On February 7, the Ministry of Finance, through Cross-Israel Highways Co. Ltd. asked for bids from financial institutions for the government's rights in Derech Eretz. Noy Fund won the tender with a bid of NIS 1.4 billion, but Derech Eretz shareholder Israel Infrastructure Fund (IIF) announced that it would exercise its first refusal rights. Derech Eretz's other shareholder, Shikun u'Binui Holdings Ltd. (TASE: SKBN), declined to do so. The Ministry of Finance found that IIF's request was not in compliance with Derech Eretz's franchise agreement with the state and senior lenders, and that the request also lacked the necessary legal permits.

IIF's shareholders Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), Bank Leumi (TASE: LUMI) unit Leumi Partners Ltd., and investment house Altshuler Shaham Ltd.

Published by Globes [online], Israel business news - - on August 30, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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