Crisis in the economy (Shutterstock photo)
A few days ago, a new law was published in Poland, a law that imposes a maximum price for electricity for at least a year and this is to deal with the energy crisis in Europe and the electricity prices that do not stop on the continent. The new law has not currently determined a specific price for a unit of electricity, but it will be determined later.
TYS is just before the IPO of its Polish clean energy arm and this is where things get complicated. An IPO now that the markets are very volatile is a difficult IPO, but if you put the new Polish law into the equation then the IPO, to put it mildly, becomes even more difficult.
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Senior officials well versed in the details of the offering told ice that Tashi insists on putting the offering on the market and is promoting it vigorously. At the same time, the officials said, it is clear that we will not receive the value we discussed a year and a half ago, nor the value we discussed only two months ago. The value that is now being talked about for Zapiros is a burden to the order of one billion shekels, almost half of the value that they were talking about in 2007 a year and a half ago.
The officials said they are not overly excited about the new law in Poland since 60% of the electricity that Zapiros sells is under contract with the government and the remaining 40% is fenced. “It is impossible to say that the new law will not have an effect on the company and the value in the offering, but in our opinion the volatility in the markets and the alternatives that are now emerging in the market are much more dangerous” said the senior official who is well versed in the company’s business and the details of the offering.
Keren 50 years ago entered the field of energy for the first time about 5 years ago when it won a contract for the sale of 220 watts of electricity produced through wind energy. Since then, the company has accumulated projects with an electricity generation capacity of 1 gigawatt. Zafiros, also known as Meshav Energy, is considered one of The promising companies of the 2017 Fund since it operates as mentioned in the field of clean energy in Poland, which is considered one of the most aggressive countries in the field of transition to electricity production from clean energy.
Zapiros already has a relationship with Poland which makes it easier for it to enter new projects and actually take an active and significant part in the industry there. At the same time, it is difficult to say that the limit imposed by the new Polish law on electricity prices will not harm the company further down the road, both due to the fact that a day will come when hedging will end and it will be forced to hedge prices at completely different costs and due to the fact that new projects will yield lower profitability and so on.
One way or another, 500Y continues under pressure to issue the company despite the difficulties it now faces, albeit at a lower value than it previously planned.
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