The Ticker: Kenon Agrees to Sell Its Latin American Energy Operations for $1.2 Billion

Court expert: Best solution for Africa Israel debt is to sell company assets piecemeal ■ Energy shares rally on report that natural-gas exports to Egypt still possible ■ Protalix readying to lay off one-fifth of its workforce ■ Tel Aviv shares advance as energy stocks rally, retailers slump

Idan Ofer, billionaire and controller of Kenon Holdings pictured in 2013.
Bloomberg

Kenon agrees to sell its Latin American energy operations for $1.2 billion

Kenon Holdings, the Israeli investment group controlled by Idan Ofer, said on Sunday it has agreed to sell IC Power’s Latin American and Caribbean businesses to infrastructure investment manager I Squared Capital for about $1.2 billion. “The sale is part of Kenon’s strategy to provide its shareholders with direct access to its businesses, including through monetization of its businesses,” the company said. The deal, which is expected to close in the next several months, is only for operations owned by IC Power’s subsidiary Inkia Energy in Latin America and the Caribbean, and does not include its OPC Energy operations in Israel.As part of the transaction, I Squared Capital will assume Inkia’s $450 million debt from a bond issue completed this month, Kenon said. Shareholders will be asked to approve a capital reduction that will enable Kenon to distribute a portion of the transaction proceeds to shareholders. Kenon shares ended up 8.5% at 70.70 shekels ($20.15). (Reuters)

Court expert: Best solution for Africa Israel debt is to sell company assets piecemeal

An expert appointed by the court overseeing the debt bailout of Africa Israel Investments said on Sunday that bondholders would be better off selling the company in parts than accepting a bid from U.S.-Israeli businessman Naty Saidoff. Emanuel Avner, an accountant appointed by the Tel Aviv District Court, said creditors would recover about 76.5% of their debt, or 2.286 billion shekels ($650 million) in a breakup, versus 71.7%, or 2.143 billion shekels, under Saidoff’s offer, which includes issuing new debt. “When a holding company is declared insolvent twice within just a few years, any proposal that again includes bonds as a major component should cause bondholders to give serious consideration to an alternative that doesn’t involve a new debt arrangement,” Avner said. Although an offer from Moti Ben-Moshe that bondholders have already rejected would have repaid just 70.6% of Africa Israel’s debt, Avner said he preferred it over Saidoff’s because of the bigger cash-payback component. (Shelly Appelberg)

Energy shares rally on report that natural-gas exports to Egypt still possible

Israeli energy shares rallied Sunday on a report that Egypt has not rejected the idea of importing Israeli natural gas.  Citing an anonymous source, Bloomberg News reported that Egyptian Petroleum Minister Tarek el-Molla told Energy Minister Yuval Steinitz that Cairo was still considering allowing imports of Israeli gas. The news came after Molla on two separate occasions this month expressed doubt about energy deals with Israel, saying once that they hinged on acceptable resolution of an arbitration ruling awarding Israel $2 billion. Spokesmen for the two ministries declined to comment. On the Tel Aviv Stock Exchange, the Oil and Gas index jumped 5% to 935.55 points, led by a 7.7% gain for Delek Drilling to 9.95 shekels ($2.84) and a 6% gain for Ratio to 2.37. The two companies are the Israeli partners in the Leviathan gas field, which stands to gain the most from any exports to Egypt. (TheMarker)

Protalix readying to lay off one-fifth of its workforce

Protalix Biotherapeutics is reportedly getting ready to lay off more than one-fifth of its staff as the biotechnology company focuses its resources on completing development of its PRX-102 drug for Fabry disease. Some 50 out of 248 employees at the Haifa-based company have been called for predismissal hearings, as required by law. Protalix is working to complete phase three clinical trials of PRX-102 after signing a licensing and collaboration agreement with Italy’s Chiesi Farmaceutici to market the drug worldwide outside the United States. Meanwhile Protalix has built up sufficient inventories of its Gaucher disease drug to meet its commitments to the government of Brazil, with which it has a $280 million contract, and the drug giant Pfizer, which sells the drug elsewhere in the world. In addition, Israeli government aid dropped by more than half this year to just $3.1 million, forcing Protalix to cut costs. Protalix shares finished down 1.6% to 2.54 shekels (72 cents). (Yoram Gabison)

Tel Aviv shares advance as energy stocks rally, retailers slump

Tel Aviv shares ended higher in relatively brisk trading on Sunday as energy shares got a lift from news that Israeli gas exports to Egypt were still in the offing. The TA-35 and TA-125 indexes both advanced about 0.5% to close at 1,440.08 and 1,320.25 points, respectively, as 808 million shekels ($230 million) in shares changed hands. Retail shares took a beating after the financial daily Calcalist reported that Amazon is in talks to set up an Israeli logistics center (see story on this page), a move that would pose a huge competitive threat to malls and local chains. Teva Pharmaceuticals ended down 2.5% to 48.65 after rallying Thursday on reports of looming job cuts.  Elbit Systems posted a 1.9% gain to end at 514.30, marking its fourth straight daily gain, while Compugen jumped 7.5% to 9.65 and Frutarom added 1% to 298. Volume leader Bank Leumi shed 1.8% to end at 19.15. (Omri Zerachovitz)