Keystone Fund has signed an agreement to purchase 50% of the desalination plant in Ashkelon

The Keystone Fund, managed by Gil Deutsch and Roni Biram, has signed an agreement to purchase 50% of the desalination plant in Ashkelon from the Desalination Engineering Company (IDE), for NIS 243 million. The desalination plant in Ashkelon has a desalination capacity of 120 million cubic meters per year and is operated by the VID franchisee, according to a franchise agreement signed with the Israeli government until May 2027, when the plant will pass to the State of Israel free of charge.
VID was equally owned by IDE, which is controlled by Avshalom Felber and Amir Lang, and Veridis, which is controlled by Delek Automotive (-5.3% 1589). Veridis held the right of first refusal to acquire the share of IDE, but chose not to do so. Veridis, on the other hand, exercised the right of refusal on the shares held by IDE (which amounts to 40.5% of the capital and 45% of the voting rights) in Edom, which is the operator of the desalination plant in Ashkelon, for NIS 129 million.
Veridis, under the indirect control of Gil Agmon, decided to exercise the right of refusal to hold IDE in red, apparently because it estimates with an 80% probability that the operating agreement for the desalination plant in Ashkelon by Edom will be extended by 25 years after delivery of the plant to May 2027. Veridis' holding in 59.5% of Edom's shares is valued at NIS 243 million. According to price allocation work, the acquisition of Veridis Adom created a free cash flow of NIS 23 million in the second half of 2018, a free cash flow of NIS 43 million in 2019 and NIS 48 million in 2020.