Holding company Kenon Holdings Ltd (TASE:KEN: NYSE: KEN-WI), controlled by Idan Ofer, is holding an IPO for IC Power, its principal holding, on the New York Stock Exchange (NYSE). IC Power, which operates electrical power stations in Latin America and Israel, today published a revised prospectus on the US Securities and Exchange Commission (SEC) website. According to this prospectus, IC Power plans to raise $311-389 million at a company value of $1.27-1.59 billion, after money.
At the same time, for controlling shareholder Kenon, the value is $230 million more than the value derived from the offering (before money), because Kenon holds a capital note that it issued to IC Power. This note will be completely repaid after the offering. Actually, $85 million of this amount has already been paid to Kenon, with the remaining $145 million to be paid immediately after the offering.
No fewer than seven underwriters took part in the IC Power offering, headed by Bank of America Merrill Lynch, Goldman Sachs, and Credit Suisse. These underwriters were to have induced investment and private institutions to make bids for 25.9 million IC Power shares at $12-15 per share. The underwriters also have an option to purchase 3.9 million more shares at the price for the offering.
If the offering is successfully completed, Kenon's stake in IC Power will fall to 75.5%, while full exercise of the underwriters' option will reduce it to 72.9%. The Kenon share responded to the news with a 2.5% jump, reflecting a NIS 2.47 million market cap. The return on the Kenon share over the past year is 25%.
IC Power operates the Mishor Rotem power station in Israel, as well as other power stations in 10 countries throughout Latin America. The company's revenue totaled $1.34 billion in the first nine months of 2016, and its operating profit was $187 million. The company reported $619 million in equity as of the end of September, amounting to 13% of its balance sheet. IC Power is responsible for most of the value of Kenon, which also owns 50% of Chinese auto venture Qoros and 32% of Zim Integrated Shipping Services Ltd..
Published by Globes [online], Israel Business News - www.globes-online.com - on January 23, 2017
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