OPC Energy, controlled by Idan Ofer, is postponing its public offering, originally scheduled for tomorrow, following the announcement by Antitrust Authority director general Michal Halperin that she would not allow the company to build more power stations in southern Israel.
It was reported today that the Committee for the Reduction of Concentration, headed by Halperin, would prevent Idan Ofer from becoming the largest private electricity producer in Israel.
The Committee today recommended that the Public Utilities Authority (electricity) not grant IC Power, a company controlled by Idan Ofer, a license to build a power station at Plugot Junction near Kiryat Gat, saying that the group was the most centralized one in the Israeli economy. Assuming that the Public Utilities Authority (electricity) follows this recommendation, the deal in which IC Power acquired the rights to build the 400-megawatt Zomet open cycle natural gas-powered electricity production station from Rapac Communication and Infrastructure Ltd. (TASE: RPAC), its Dutch partner, will be overturned.
Last week, OPC Energy completed the institutional part of its IPO, with demand totaling NIS 700 million. The company was seeking to raise $100 million (NIS 350 million), but decided to increase the amount slightly, due to the lively demand.
OPC is a subsidiary of ICP Power, controlled by Idan Ofer-controlled Kenon Holdings Ltd (TASE:KEN: NYSE: KEN-WI). Kenon tried to hold an IPO for IC Power on Wall Street early this year at a $1 billion company value, but did not succeed. Following the failure in the US, the company decided to hold an IPO for its OPC subsidiary, which handles the company's energy business in Israel. OPC is regarded as a good company that is attractive to investors, but after IP Power's US IPO failed, Kenon demanded that the underwriters assume full responsibility for the Tel Aviv Stock Exchange (TASE) IPO, a commitment that proved unnecessary.
The issue proceeds are meant to pass upwards in the corporate chain; Kenon will use them to repay a $200 million loan from Israel Corporation (TASE: ILCO) used to finance an investment in Chinese auto venture Qoros. Some of the proceeds are meant to pay for construction of the power station that the Antitrust Authority has now barred.
At this stage, the company has notified the TASE that it is postponing the public stage of the IPO, without mentioning a new date. In view of the situation created, the underwriters, led by Leumi Partners Ltd., will have to ask the investment institutions that participated in the offering to confirm their orders. Informed sources told "Globes" that the new power station whose construction is being prevented by the Antitrust Authority was in any case not taken into account in the pricing of the offering, and that the Antitrust Authority's announcement should therefore have no effect on the investment institutions' orders.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 7, 2017
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