Business in Brief: Aeronautics Shares Soar Amid Changing Sentiment on Troubled Drone Maker

Delek to sell 30% of desalination-tech company IDE to partner for $142 million; Tamar-Leviathan partners reach accord on pipeline for Egyptian gas exports; Energean signs natural gas agreement with Israel’s IPM worth a potential $900 million

A drone model on display at a booth of the Israeli drone maker Aeronautics Group at the Singapore Airshow.
\ STAFF/ REUTERS

Aeronautics shares soar amid changing sentiment on troubled drone maker

Aeronautics is in talks to sell its 50% stake in Controp Precision Technologies, a maker of electro-Optical and precision motion control systems for defense and homeland security applications, to the U.S. private equity giant KKR at a $150 million valuation, TheMarker has learned. Aeronautics, the troubled maker of military drones, reported it was in talks on Tuesday but didn’t identify the buyer or financial terms. The prospective sale, for which Aeronatics would get 280 million shekels ($74.9 million), is the latest development that has seen the share price soar for the troubled maker of military drones. On Sunday investor Aharon Frankel reported building up his stake in the company to 17.3%. A day later Israel Aerospace Industries said Tuesday it was in talks to invest in the company. State-owned IAI said the talks were at an early stage, and no financial details were disclosed. Shares of Aeronautics closed up 0.5% at 9.23 shekels on Wednesday. (Guy Erez)

Delek to sell 30% of desalination-tech company IDE to partner for $142 million

Sixteen years after it bought a 50% in the desalination-technology company IDE for $20 million, Israel’s Delek Group is about to sell most of the stake at 10 times the valuation. Delek said on Wednesday it had agreed to sell a 30% holding in IDE for the equivalent of 530 million shekels ($142 million), a sale that values it entire stake at close to $200 million. The buyer is Alfa Partners, an investor led by IDE’s CEO, Avshalom Felber, and backed by a group of Israeli institutional investors, that own the other 50% of the IDE. The sale will take place in two stages, with Delek taking a 100 million shekel divided out of IDE and then selling the stake to Alfa for $94 million. The deal is expected to be completed in the first half and yield Delek a 150 million shekel gain. Delek Shares finished down 0.8% at 557.70 shekels. (Yoram Gabison)

Tamar-Leviathan partners reach accord on pipeline for Egyptian gas exports

The partners in Israel’s Tamar and Leviathan gas fields have reached an agreement with Israel Natural Gas Lines Company to use the state-owned company’s southern pipeline to export gas to Egypt, TheMarker has learned. Under the terms of the contract, the Tamar and Leviathan partners will be able to use all of the pipeline’s 2.5 billion cubic meters annual capacity in the first phase. INGL agreed to expand the pipeline over the next two years, subject to approvals and financing, that will boost capacity to 4.4 BCM, but the partner swill not be able to use all of it due to growing Israeli domestic needs, sources said. Another 2.5 BCM of gas is supposed to be delivered via INGL’s northern pipeline linking to Jordan’s Pan-Arab pipeline. The Tamar and Leviathan partners Delek Drilling and Noble Energy signed a contract last year to sell Egypt Dolphinus Holdings at least 3.5 BCM annually. (Eran Azran)

Energean signs natural gas agreement with Israel’s IPM worth a potential $900 million

Greece’s Energean Oil & Gas said on Wednesday it had signed an agreement to supply 5.5 billion cubic meters of gas from its Israeli Karish and Tanin fields over 19 years to the Israeli power company IPM Beer Tuvia. The contract is contingent on results of the 2019 drilling program, which includes the drilling of four wells in Israel. Energean estimated the agreement would generate $900 million in revenue over the life of the contract. Energean has now signed gas supply agreements for 4.6 BCM annually from Karish and Tanin, which are being built with a total capacity of 8 BCM a year. “Our future sales contracts will target both the growing domestic and regional export markets,” said Energean Chief Executive Mathios Rigas. Energean said it expects to reach deals on the remaining capacity in the medium term.The Karish and Tanin development remains on track for first gas in the first quarter of 2021. Energean shares closed up 5.2% in London at 661 pence ($8.37). (Reuters)

Tel Aviv shares recover from lows but finish in the red

Tel Aviv shares shook of New Year blues on Wednesday to recover from their lows for the day. Nevertheless, the benchmark TA-25 index ended down 1% at 1,463.78 points, while the TA-125 lost 1.1% to end at 1,334.20, on turnover of 1.3 billion shekels ($350 million). Volume leader International Flavors & Fragrances lost 1.1% to end at 500.50 shekels. Bank shares were down, too – Leumi declined 1.65% to 22.70, Hapoalim 1.1% to 23.88 and Mizrahi Tefahot by 1.2% to 63.31 Bezeq dropped 1.4% to 3.62. Kamada climbed 2.1% to 1925 after it said unaudited revenues for the fourth quarter would be between $46.7 million and $48.7 million, bringing full-year 2018 revenue to $113 million and $115 million. That is up from a previous forecast of $102 million to $108 million. OPC led TA-125 gainers, adding 4.1% to close at 20.25. AudioCodes rose 1,2% to 37.69 after it received court approval to repurchase up to $12 million of its shares. (TheMarker Staff)