Israel’s Delek to Sell Assets in Finance Sector

Two oil and gas companies voiced their intentions to sell non-core assets. DONG Energy has decided to sell an area previously used by unit  2 of the Ensted Power Station, according to a note released on Saturday, while Delek Group announced on Sunday it signed a non-binding MoU to sell its 47% stake in Israeli insurer Phoenix Holdings to US-based Kushner Funding.  

Delek Group, Israel’s main energy company, also holds assets in the finance sector. If it wants to capitalise on Tamar and Leviathan discoveries, sales of other non-core assets are more than likely, especially given the fact that it is forced to do so by an Israeli law passed in December. The law prohibits companies from having stakes in both financial services companies and other industrial businesses. Delek Group already said it is examining the possibility of a strategic split.  

‘The MOU includes a number of fundamental conditions to the agreement. The full consideration for the sold shares will be an amount equal to the shareholders equity of the Phoenix as of 30th December 2013, multiplied by the percentage of shares sold in addition to the interest rate agreed that will be added to the consideration from 1st January until the day of completion of the transaction,’ the company wrote on its website. 

According to Reuters, Delek Group could sell the asset for nearly 1.7 billion shekels ($498 million).

The Kushner Group is focused on real estate and banking. It also owns the New York Observer.