Approved: Meshek Energy acquires 40% of Dalia Energies for NIS 1.3 billion

The Audit Committee and the Board of Directors of the Renewable Energy Company, Meshek Energy, approved the agreement under which the kibbutz economies will purchase 40.6% of the shares of Dalia Energies, which operates one of the largest conventional power plants in Israel, at a company value of NIS 3.18 billion. This is in exchange for the allotment of 68% of its shares at a company value of NIS 623 million.
As part of the deal, Energy Farm, managed by Chen Melamed, will also acquire 50% of the shares of Mi-Ram, a company that distributes and supplies electricity in the kibbutz sector - and began operating in the field of energy storage, and full ownership of Telikum Communications - which is licensed by a virtual electricity supplier. Following the transaction, the kibbutz farms will hold 63.6% of the capital of the energy farm.
Dalia Energies is the owner of the Tzafit power plant with two production units, which operate with combined cycle technology, ie electricity generation using two turbines: gas and steam, where the residual heat - emitted from the gas turbine - is used to run the steam turbine, without added fuel. Production rises from 39% to 58%. The two production units operate at a power of 912 megawatts, which is 4.6% of the electricity supply installed in the economy.
Dalia currently allocates 40% of the power to the IEC in a permanent availability arrangement, and 60% of the production capacity to private customers - according to long-term sales agreements. However, starting in April 2022, Dalia will move to a full allocation of production capacity to private customers, which will increase its revenues. According to estimates, Dalia Energy is expected to end 2022 with a revenue turnover of NIS 2 billion, and a cash flow operating profit (Ebitda) of NIS 750 million.
The Energy Economy states that it is conducting preliminary contacts for the purchase of additional shares, on terms similar to the terms of employment with the kibbutz economies.
In addition to the kibbutz economies, the shareholders in Dalia Energies include SII-Int-Energy, owned by the George Horesh Family Investment Union (8.67%), the 5771 fund owned by Yaron Kastenbaum, Yehuda Raveh and the Harel Insurance Company (5). Hiram Epsilon (25.675%) - owned by Union Horesh Investments of the Horesh family (51.24%), the Fishman family (37.25%) and the Jezreel Valley farms (11.5%) - and Daniel Caesarea (20%).
Purchasing a holding in Dalia Energies in a stock business may raise the credit rating of an energy economy from the BBB + level to an A- level, and increasing the holding beyond 50% may improve the credit rating of an energy economy to A, thereby lowering the company's debt raising costs.
The merger between the Energy Farm and Dalia created an important relative advantage for the merged company in the energy market, thanks in part to the license it received to be a virtual supplier of electricity, and to sign deals of selling electricity to private customers. An energy economy will be one of the few that can provide a mix of cheap solar energy during the day and conventional energy during the hours of darkness. The emerging gas agreement between Dalia and the Tamar deal may lead to a decrease in the station's production cost.
Dalia is also setting up a 40-megawatt-hour storage farm, and has an expansion potential of 600-700 megawatts, following the National Infrastructure Committee's decision to allow the construction of conventional stations, adjacent to existing stations, such as OPC Rotem and Dalia.
Dalia Energy is also bidding for the acquisition of ownership of the IEC cluster power plant, after not winning tenders for the purchase of IEC power stations in Ramat Hovav and Hagit. According to estimates, the acquisition of control of Dalia Energies by the Energy Economy will allow the systems to be consolidated and provide customers with discounts of 5% -6% during daylight hours, compared to the production component set by the Electricity Authority, and refer to conventional daylight saving capacity. Possible customers for this discount are the kibbutz economies and Sonol EV - whose energy holding 50% of its shares - is engaged in the installation and operation of charging stations for electric vehicles.