Delek to sell 10% of Tamar in Tel Aviv

Delek Drilling and Avner, the two Delek Group's subsidiaries with 31.5% shareholdings in Tamar, announced in a filing April 25 to the Tel Aviv Stock Exchange (TASE) a plan to divest 10% of the Tamar gas field.

Delek will establish a new entity, whose sole asset will be the rights to Tamar, which will issue either equity or bonds and probably a combination of both, in the TASE, to institutional investors as well as to the public. The proceeds will be used by the new entity to purchase 10% of Tamar from Delek Drilling and Avner which will distribute their earnings as dividends. Delek has to sell off all its holdings in Tamar in four years and the company expects over $2bn.

The new entity, either a company or a limited partnership, will be established and traded in Tel Aviv, despite earlier indications by Delek Group of its intention to sell Tamar on international markets. Delek still considers raising money abroad later, and it is also looking at an option to sell a block of Tamar shares to investors.

Delek expects to sell the rights for about $1.2bn, valuing Tamar at over $12bn, the project's valuation benchmark which was set when Noble Energy sold a 3.5% shareholding to Everest, a limited partnership, last year. Delek hopes to complete the transaction in two months and get about 30% foreign investment. All of the new company's equity will be sold.

Delek CEO Yossi Abu

(Credit: Delek)

Two weeks ago, Isramco, with 28.5% in Tamar, announced plans for issuing $450mn bonds, secured against Tamar earnings, in order to distribute dividends to its shareholders. That will bring the total raised based on Tamar valuation to $2bn in the last 12 months.

Ya'acov Zalel