SINGAPORE, Nov. 26, 2017 /PRNewswire/ -- Kenon Holdings Ltd.
("Kenon") (NYSE: KEN; TASE: KEN) announces that Inkia Energy
Limited ("Inkia"), a wholly-owned subsidiary of IC Power Ltd. ("IC
Power"), has entered into an agreement (the "SPA") to sell all of
its Latin American and Caribbean
businesses (the "LatAm Businesses") for cash consideration of
$1,177 million plus excess
proportionally consolidated group cash at closing above
$49.9 million (as of September 30, 2017, Inkia's proportionally
consolidated group cash was approximately $192 million) to I Squared Capital (the "Buyer"),
an infrastructure private equity firm.
The initial purchase price is subject to a number of
adjustments, including for changes in working capital and
outstanding debt at closing compared to June
30, 2017, and an upward adjustment to the extent Inkia's
proportionally consolidated group cash at closing exceeds
$49.9 million.
As part of the transaction, the Buyer will assume Inkia's
$450 million of bonds, which were
issued in November 2017.
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 transaction includes only the
LatAm Businesses. IC Power's Israeli asset OPC Energy Ltd. is not
being sold as part of the transaction.
The SPA contains customary representations, warranties and
covenants, including covenants relating to the operations of
Inkia's LatAm Businesses during the period between signing of the
SPA and closing. Inkia and the Buyer have agreed to indemnify each
other for losses arising from certain breaches of representations
and warranties in the SPA and for certain other liabilities,
subject to time and amount limitations. Inkia's indemnification
obligations under the SPA will be secured by a pledge of 25% of the
shares of OPC Energy Ltd. (TASE: OPC) and a corporate guarantee
from Kenon, both for a period of three years. In addition, the
transaction will include a deferral of $175
million of the purchase price in the form of a four-year
$175 million deferred payment
obligation accruing 8% interest, payable in kind, which can be used
to set off against Inkia's indemnification obligations to the
Buyer.
The transaction is subject to customary closing conditions,
including the receipt of consents under debt facilities and other
agreements, the absence of a "Material Adverse Effect" and the
delivery of various closing documentation; there are no conditions
for financing or anti-trust approval. The transaction is expected
to close within the next several months.
The consideration that Inkia will receive in the transaction is
before transaction costs, taxes and certain other expenses. Kenon
will retain the right to pursue, and retain the proceeds from,
certain claims relating to some of the businesses sold in the
transaction.
Bank of America Merrill Lynch acted as financial advisor to the
seller.
Kenon is also convoking an extraordinary general meeting ("EGM")
at which Kenon's shareholders will be asked to (i) ratify the sale
by Inkia of its LatAm Businesses as discussed above and (ii)
subject to the completion of the sale, approve a capital reduction
to enable Kenon to distribute a portion of the transaction proceeds
to its shareholders. At this time, Kenon's board of directors has
not made a determination as to whether it will make a distribution,
and to the extent it decides to make a distribution, as to the
timing or amount of any such distribution. A notice of EGM will be
published, and a proxy solicitation will be commenced, on
November 27, 2017. The EGM will be
held on December 19, 2017. Further
information on the transaction and the proposed capital reduction,
will be included in a Proxy and Information Statement.
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 statements about the terms of the
sale of Inkia's Latin American and Caribbean businesses, including closing
conditions, the timing of closing, purchase price adjustments,
indemnification obligations and support for such obligations,
Kenon's retention of claims relating to the businesses sold in the
transaction, and about the convocation of an EGM. These statements
are based on Kenon's management's current expectations or beliefs,
and are subject to a number of risks and uncertainties, many of
which are beyond Kenon's control, and which could cause actual
results to differ materially from those indicated in such
forwardlooking statements. Such risks include the risk that closing
does not occur within the expected timeline, that closing
conditions are not met and other risks relating to the transaction,
including potential indemnification obligations, transaction costs
and taxes payable and other risks associated with the sale and
other risks and factors, including those risks set forth under the
heading "Risk Factors" in Kenon's Annual Report on Form 20-F filed
with the SEC and other filings. 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:
Jonathan Fisch
Director, Investor Relations
jonathanf@kenon-holdings.com
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SOURCE Kenon Holdings Ltd.