IC Power Executes Agreement with Hadera Paper in Respect of Power Plant in Israel
SINGAPORE, June 8, 2015 /PRNewswire/ -- Kenon Holdings (NYSE: KEN, TASE: KEN) (Kenon) announced that IC Power Ltd. (IC Power), a wholly-owned subsidiary, announced today the execution of an agreement with Hadera Paper Ltd., pursuant to which IC Power has agreed to acquire from Hadera Paper 100% of the shares in Advanced Integrated Energy Ltd. (Integrated Energy). Integrated Energy holds a conditional license for the construction of a 120MW cogeneration power station and operates Hadera Paper's energy center at Hadera Paper's site which currently supplies electricity and steam to Hadera Paper's facility.
Consideration for the transaction is NIS 60 million (approximately $15.6 million). Additional investments by IC Power will be required to enable Integrated Energy to complete construction of the power plant.
The power plant is expected to supply the electricity and steam needs of Hadera Paper's facility as well as provide electricity to end users in Israel. The new power plant is expected to commence operations in the second half of 2018. The power plant will have a high level of energy utilization due to usage of the cogeneration technology, which supplies electricity and steam in a single production process. The power plant will operate using natural gas.
The acquisition agreement includes the following provisions:
- IC Power and Hadera Paper will enter into an agreement for the supply of electricity and steam from the power plant constructed by IC Power to Hadera Paper's facility, for a period of 18 years from the date the power plant commences operations pursuant to which Hadera Paper will acquire all of its electricity and steam needs from Integrated Energy. The agreement will provide for minimum quantities of steam to be purchased by Hadera Paper, which is subject to adjustment. There will also be an agreement for the supply of steam and electricity from Integrated Energy and electricity from OPC Rotem (a subsidiary of IC Power which operates a power plant in Israel) until the time the power plant commences operations.
- Hadera Paper has a gas supply agreement with the Tamar Group and a gas transport agreement with Israel Natural Gas Lines Ltd., both of which will be assigned to Integrated Energy.
- Hadera Paper shall lease to Integrated Energy the property within Hadera Paper's manufacturing plant where the Energy Center is currently located, as well as an adjacent property where the power plant is being constructed; the lease duration is for 25 years, but shall not exceed 20 years from the commencement of commercial operations of the power plant. Completion of the acquisition is subject to satisfaction of various conditions precedent, including receipt of the required regulatory approvals, and the parties have the right to terminate the agreement if such conditions are not met by the end of 2015.
About IC Power
IC Power is a part of Kenon's group and is a global company that owns private power plants in 10 countries in Latin America and in Israel, with an aggregate installed (including pipeline) capacity of approximately 4,000 megawatt.
IC Power, through its subsidiary – OPC Rotem, constructed and owns the first private power plant in Israel, with an installed capacity of 440 megawatt, and which operates in Mishor Rotem. The plant is a combined cycle power plant which operates on natural gas, and which has been in operation since June 2013, supplying discounted electricity primarily to private consumers.
About Kenon Holdings
Kenon is a newly-incorporated holding company that operates dynamic, primarily growth-oriented businesses. The companies it owns, in whole or in part, are at various stages of development, ranging from established, cash generating businesses to early stage development companies. Each of our businesses was formerly held by IC, which spun off these businesses with the aim to enhance value for its shareholders in the long term, by enhancing the business focus in the holding of portfolio companies, exposing these businesses to more focused public of investors within their areas of activities, creating structural flexibility in the holding of these businesses and "simplifying" the structure. Our businesses comprise:
- IC Power (100% interest) – a leading owner, developer and operator of power generating facilities in the Latin American, Caribbean and Israeli power generation markets;
- Qoros (50% interest) – a China-based automotive company;
- Tower Semiconductors (22.5% interest assuming full conversion of outstanding capital notes) – a global foundry manufacturer, with shares traded on NASDAQ and the TASE;
- ZIM (32% interest) – an international shipping company; and
- Two early stage businesses in the renewable energy sector - Primus (91% interest) – a developer of alternative fuel technology and HelioFocus (70% interest) – a developer of solar technologies.
Kenon's primary focus is to grow and develop its primary businesses, IC Power and Qoros. Following the growth and development of its primary businesses, Kenon intends to provide its shareholders with direct access to these businesses, when Kenon believes it is in the best interests of its shareholders for it to do so based on factors specific to each business, market conditions and other relevant information. Kenon intends to support the development of its non-primary businesses, and to act to realize their value for its shareholders by distributing its interests in its non-primary businesses to its shareholders or selling its interests in its non-primary businesses, rationally and expeditiously. For further information on Kenon's businesses and strategy, see Kenon's publicly available filings, which can be found on the SEC's website at www.sec.gov. Please see http://www.kenon-holdings.com for additional information.
Contact Info |
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Kenon Holdings Ltd. |
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Barak Cohen VP Business Development and IR Tel: +65 6351 1780; +972-54-3301100 |
Zongda Huang Associate Director, Business Development & IR Tel: +65 6351 1780 |
External Investor Relations Ehud Helft / Kenny Green GK Investor Relations Tel: 1 646 201 9246 |
SOURCE Kenon Holdings Ltd.
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