Delek Power Stations, a limited partnership owned by the Delek Group, has signed a deal to sell its power generation business, which includes two power plants in Israel with a combined capacity of 227MW, to Delek The Israel Fuel (Delek Israel).
Image: Delek Power Stations to offload two Israeli gas-fired plants to Delek Israel. Photo: courtesy of dlritter/Freeimages.com.
As part of the deal, the companies owning and operating the Ashkelon Power Station, an 87MW gas-fired power plant and the Sorek Power Station, a 140MW natural-gas fueled plant, will be sold to Delek Israel, which is also a subsidiary of the Delek Group.
The power plants will be sold for a total consideration for the deal shareholders’ loans, a capital note and share capital of NIS475m ($130.49m). The amount will be paid in cash to Delek Group on the date of completion of the deal and additional consideration that could amount to NIS65m ($17.86m) that will be subject to the occurrence of events.
Delek Group had listed the two independent power plants under its list of non-core assets and has been assessing multiple options for selling its complete stakes in them.
The Ashkelon Power Station located in Ashkelon was established to supply power to the Ashkelon desalination plant. The power plant has been operating since January 2008.
The Sorek Power Station, on the other hand, was developed primarily to provide power to the Sorek desalination plant. Built with an investment of $200m, the Sorek gas-fired plant began operations in September 2017.
It delivers half of its output for the Sorek desalination plant while the remaining capacity is sold to private customers and/or to the Israel Electricity Corporation.
In another development, Delek Group said that its wholly-owned subsidiary Ithaca Energy has agreed to acquire all the Greater Stella Area (GSA) licenses and associated infrastructure interests in the North Sea of Dyas UK and Petrofac. The transaction is expected to boost the Delek subsidiary’s North Sea production and reserves base.
GSA is contained in the Central Graben area of the Central North Sea, on the UK Continental Shelf.