The Israel Shipyards Industries Group reports today on a significant transaction by its subsidiary, Israel Shipyards, which manufactures vessels. Israel Shipyards has entered into an agreement to supply two vessels and various services to a government customer in Africa. The consideration in the transaction is approximately NIS 38.5 million (approximately 10.7 million euros), as part of which Israel Shipyards will supply the vessels over a period of approximately 22 months.
According to the terms of the transaction, an advance of approximately 15% of the consideration will be paid to the company, and the balance of the consideration will be paid according to agreed milestones. In addition, as part of the agreement, the customer was given an option to purchase another vessel within 6 months from the date of signing the transaction, for approximately NIS 19.2 million (approximately EUR 5.35 million), so that if the customer exercises the option, the total scope of the transaction will be NIS 58 million (about 16 million euros). Israel Shipbuilding Industries notes that the profitability rate of the project is similar to the average in the field of activity.
The agreement includes a series of terms and conditions as accepted in agreements of supplying military equipment to foreign customers, including requirements for obtaining export permits, protection of intellectual property, confidentiality and more.
Israel Shipyards notes that the deal supports the company’s strategy to deepen collaborations with suppliers and leading companies in order to increase the supply of products and services that the company provides to its customers. This is against the background of the work, because it is a type of vessel that is first sold by the shipyard.
Eitan Zucker, CEO of Israel Shipyards: “The current transaction is of strategic and significant importance for Israel Shipyards. As part of this transaction, we will provide the customer with a lander-type vessel. We identify an evolving market segment for vessels from this family that enables operational activity and logistical support to combat forces. The deal expands the basket of products and services we can now offer our existing customers, and opens up opportunities for us with new customers and markets. The choice of Israel Shipyards in this transaction illustrates the company’s position as a professional and quality market leader, and as an international player in the field of vessel production and development, thanks to the vast experience and knowledge accumulated in the company over the years. “