SINGAPORE, April 30, 2015 /PRNewswire/ --
Key Highlights
- Kenon Holdings Ltd.'s ("Kenon") Board of Directors has
approved the convocation of an Extraordinary General Meeting
("EGM") to seek approval for a capital reduction in connection with
Kenon's proposed distribution of Kenon's shares in Tower
Semiconductor Ltd. ("Tower")
- Kenon's Board of Directors has approved an investment of
RMB400 million (approximately
$65 million) in Qoros Automotive Co.,
Ltd. ("Qoros") and a RMB175 million
(approximately $28 million) guarantee
of a new Qoros bank financing
Kenon is providing the following updates in respect of its stake
in Tower, a specialty foundry manufacturer listed on the NASDAQ
Global Select Stock Market and Tel Aviv Stock Exchange in which
Kenon has an approximately 24% interest, and its interest in Qoros,
an automotive company based in China, in which Kenon indirectly owns a 50%
interest.
Tower
Kenon's Board of Directors Approves Convocation of EGM and
Proxy Solicitation in Respect of Kenon's Proposed Distribution of
Shares of Tower
Kenon's Board of Directors has approved the convocation of an
EGM at which Kenon's shareholders will be asked to approve a
capital reduction to enable Kenon to distribute, on a pro rata
basis, some, or all, of the 18,030,041 ordinary shares of Tower
held by Kenon, as well as 1,669,795 ordinary shares of Tower
underlying the 1,669,795 Series 9 Warrants of Tower (the
"Warrants") held by Kenon (the "Proposed Distribution"). A Notice
of EGM is expected to be announced, and a proxy solicitation is
expected to be commenced, on or about May 1,
2015. The EGM would be held not less than 21 days following
the Notice of EGM. Further information about the Proposed
Distribution, including tax consequences in certain jurisdictions,
will be included in a Proxy and Information Statement to be
published at the time the EGM is announced.
The Proposed Distribution is one of the first key steps in the
implementation of Kenon's strategy, and will provide Kenon's
shareholders with direct access to Tower, which Kenon believes is
in the best interests of Kenon's shareholders. For further
information on Kenon's strategies, see Kenon's Annual Report on
Form 20-F filed with the SEC.
Qoros
Kenon's Board of Directors Approves Kenon's Provision of
a RMB400 million (Approximately
$65 Million) Shareholder
Loan to Qoros and a RMB175 Million (Approximately $28 Million) Guarantee in Connection with Qoros'
Entry into a New Financing Agreement
Kenon's Board of Directors has approved a RMB400 million (approximately $65 million)
shareholder loan to Qoros to promote its growth and development,
subject to Chery Automobile Co. Ltd.'s ("Chery") concurrent
provision of a RMB400 million
shareholder loan to Qoros. In addition, Kenon's Board of Directors
has approved Kenon's provision of a RMB175
million (approximately $28 million) direct, or
back-to-back, guarantee (as discussed below) in connection with
Qoros' entry into a new financing agreement, subject to Chery's
provision of a similar guarantee. Kenon's investment in Qoros
and the guarantee of its new financing facility is consistent with
Kenon's strategy to provide Qoros with additional equity capital,
loans, and/or credit support to assist it as it continues to pursue
its commercial growth strategy.
Kenon expects all, or a portion, of the RMB400 million (approximately $65 million)
shareholder loan to convert into additional equity in Qoros upon
the satisfaction of certain conditions, including the approval by
the relevant Chinese authority. Chery, which (indirectly) owns the
other 50% in Qoros, is expected to provide a RMB400 million shareholder loan to Qoros
concurrently with, and subject to the same terms and conditions as,
Kenon's shareholder loan to Qoros. As a result, Kenon's ownership
percentage in Qoros will not increase upon Qoros' full, or partial,
conversion of Kenon's RMB400 million
shareholder loan into equity.
Kenon intends to fund the RMB400
million shareholder loan through drawdowns of $65 million under its $200
million credit facility from Israel Corporation Ltd. ("IC")
(the "Credit Facility"). Under the terms of the Credit
Facility, these drawdowns will require Kenon to pledge an
additional 6.5% of its interest in IC Power to IC. As a result of
these drawdowns, the aggregate drawdowns under the Credit Facility
will be $110 million and an aggregate
59.5% of Kenon's equity interest in IC Power will be pledged to
IC.
Qoros is negotiating a new RMB700
million (approximately $113 million) financing
agreement, pursuant to which Qoros would initially be able to
drawdown up to RMB350 million
(approximately $56 million). Any drawdowns in excess of
RMB350 million would require approval
from Qoros' Board of Directors, and may require additional credit
support from Qoros' shareholders. Kenon has agreed to provide a
RMB175 million (approximately
$28 million) guarantee of this facility, subject to Chery's
provision of a similar guarantee. Kenon's guarantee may be provided
as a back-to-back guarantee to Chery or directly to the banks. Any
credit support from Kenon in excess of the RMB175 million guarantee would require
additional approval from Kenon's Board of Directors.
The shareholder loans and guarantees described above are in
addition to the existing commitments of Kenon and Chery. Chery has
previously agreed to provide a RMB400
loan to Qoros to match a corresponding RMB400 million loan made by Kenon earlier in
2015, subject to certain conditions, including the release of
Chery's RMB1.5 billion guarantee of
Qoros' existing RMB3 billion credit
facility. Kenon has agreed that if Chery's loan is provided without
the corresponding release of Chery's RMB1.5
billion (approximately $242
million) guarantee, Kenon and Chery will find an appropriate
mechanism to restore equality between Chery and Kenon in respect of
Chery's guarantee of this credit facility, and such a mechanism
could involve Kenon providing further credit support to
Qoros. In April 2015, Chery
made a RMB200 million (approximately
$32 million) shareholder loan to Qoros (representing half of
the RMB400 million (approximately
$65 million) shareholder loan Chery had previously committed
to provide to Qoros). There was no release of Chery's guarantee in
connection with its provision of this shareholder loan in April
2015.
About Kenon
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. Kenon's businesses consist of:
- IC Power (100% interest) – a leading owner, developer and
operator of power generation facilities in the Latin American,
Caribbean and Israeli power
generation markets;
- Qoros (50% interest) – a China-based automotive company;
- ZIM Integrated Shipping Services, Ltd. (32% interest) – an
international shipping company;
- Tower (24% of the currently outstanding shares of Tower) – a
global foundry manufacturer, with shares traded on NASDAQ and the
TASE; and
- Two early stage businesses in the renewable energy sector –
Primus Green Energy, Inc. (91% interest) – a developer of
alternative fuel technology and HelioFocus Ltd. (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 we
believe 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 also see
http://www.kenon-holdings.com for additional information.
Caution Concerning Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to, (i) with
respect to the Proposed Distribution, statements about the timing
and convocation of an EGM, statements about the Proposed
Distribution, including the maximum number of shares that may be
distributed, conditions to the Proposed Distribution, statements
concerning the objectives of the Distribution and (ii) with respect
to the loan to Qoros and the guarantee of Qoros' new financing
agreement, statements about Kenon's approval of a loan to Qoros and
guarantee of certain of Qoros' indebtedness, Kenon's and Chery's
commitments to provide further loans and credit support to Qoros,
statements about Kenon's and Chery's agreement to provide a
mechanism for equality in respect of Chery's RMB1.5 billion guarantee of Chery's existing
credit facility (in the event that the loan Chery has previously
committed to provide to Qoros is not accompanied by a release of
this guarantee), statements about Kenon's strategy and other
non-historical matters. These statements are based on Kenon's
management's current expectations or beliefs, and are subject to
uncertainty and changes in circumstances. These forward-looking
statements are subject to a number of risks and uncertainties, many
of which are beyond Kenon's control, which could cause the actual
results to differ materially from those indicated in Kenon's
forward-looking statements. Such risks include (i) with respect to
the Proposed Distribution, risks related to a failure to
successfully satisfy the conditions of the Proposed Distribution,
including the receipt of required shareholder and any other
required approvals or otherwise a failure by Kenon to complete the
Proposed Distribution, the number of shares ultimately distributed
in the Proposed Distribution (which Kenon has not yet determined),
and timing of the Proposed Distribution as well as tax consequences
of the Proposed Distribution and (ii) with respect to the loan to
Qoros and the guarantee of Qoros' new financing agreement, risks
relating to the expected loans to Qoros and guarantees of its debt,
including the conditions relating thereto, availability of funding
under Qoros' new financing facility and possible conditions
(including possible requirements for additional shareholder credit
support) for drawings in excess of RMB350
million and other risks and factors, including those set
forth under the heading "Risk Factors" in Kenon's Annual Report on
Form 20-F, filed with the SEC. Except as required by law, Kenon
undertakes no obligation to update these forward-looking
statements, whether as a result of new information, future events,
or otherwise.
Contact Info
Kenon Holdings Ltd.
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Barak
Cohen
VP Business
Development and IR
barakc@kenon-holdings.com
Tel: +65 6351 1780;
+972-54-3301100
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Zongda
Huang
Associate Director,
Business Development & IR
huangz@kenon-holdings.com
Tel: +65 6351
1780
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External Investor
Relations
Ehud Helft / Kenny
Green
GK Investor
Relations
kenon@gkir.com
Tel: 1 646 201
9246
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SOURCE Kenon Holdings Ltd.