Eurocom Communications, a company in liquidation proceedings, is preparing to sell its holdings in Enlight Renewable Energy Solutions Ltd. (TASE:ENLT). Last Thursday, Eurocom petitioned the Tel Aviv District Court for authorization to sell its stake in Enlight through a private auction for investment institutions in the capital market. Eurocom filed its petition following the liquidation order issued by Tel Aviv District Court President Judge Eitan Orenstein.
The petition was supported by the observers appointed for Eurocom and with the consent of three of the company's main creditors: Israel Discount Bank (TASE: DSCT), Bank Hapoalim (TASE: POLI), and First International Bank of Israel (TASE: FTIN), to which Eurocom owes NIS 961 million. Sources inform "Globes" that the auction for investment institutions is being planned for this week, after Orenstein granted the petition today.
Eurocom, controlled by Shaul Elovitch, holds 14.8% of Enlight's shares with a market value of NIS 122 million. Eurocom will make the sale together with the Weil family, its partner in the controlling interest in Enlight. Through the Givon Investment Partnership, the Weil family owns 8.3% of Enlight's shares, with a market value of NIS 68 million. The sale will therefore leave Enlight without a controlling shareholder.
Enlight said that when the sale of the shares is completed, the shareholders' agreement signed by Eurocom with the Weil family, CEO Gilad Yavetz, VP operations and engineering Amit Paz, and VP marketing, sales, and business development Zafrir Yoeli would expire. The latter three jointly hold 5% of Enlight's shares, and two of them also serve as directors in the company.
Vote on trust deed revision
Sources also told "Globes" that completion of the sale of the shares would be contingent on approval by holders of Enlight's Series B bonds of a revision in the deed of trust for the bond series. The existing deed of trust entitles the bondholders to immediate payment of the entire debt in the event of a change in the company's controlling interest.
Enlight has one main bond series (Series B) amounting to NIS 157 million, payable in 2019-2021. The holders of the Series B bonds will vote on Thursday on the proposed change in Section 7.1.22 of the deed of trust. The revision states that the sale of Eurocom's shares to investment institutions does not constitute a change of control in the company, and therefore does not constitute grounds for demanding immediate redemption of the bonds.
Enlight has activity in renewable energy in Israel and Europe. In Israel, the company designs, builds, and operates photovoltaic projects. As of the end of March, the total capacity of systems developed and constructed by the company was 86 megawatts put into the electricity grid, on which the company's holdings amount to 69 megawatts. In addition, Enlight won a tender to supply 73 megawatts more of electricity to the distribution network in the framework of two tenders published for the construction of photovoltaic facilities. The company's market cap is NIS 824 million, following a 10% drop in its share price this year, after the share gained 110% in the three preceding years.
Enlight operates in Europe mainly in wind energy. The company has a wind energy venture in Ireland with a 13.6-megawatt capacity that should generate €3.2 million in annual revenue. In Croatia, Enlight is on the verge of commercial operation of a wind energy project with a 49-megawatt capacity that should generate €14 million a year, while in Serbia, operation of a wind energy project with a 105-megawatt capacity is scheduled to begin a year from now and generate €28 million in annual revenue.
Enlight finished 2017 with NIS 37.4 million in revenue and a NIS 1.1 million net profit. The company's shareholders' equity totals NIS 330 million, and its debt totals NIS 942 million.
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2018
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