Egged (Flash 90 photo, Facebook/ Egged)
About three weeks ago, the Keystone Infrastructure Fund announced the issuance of the rights to complete the acquisition of Egged, and now it seems that the saga is about to come to a successful conclusion.
Keystone, founded by Roni Biram and Gil Deutsch, raised NIS 300 million in a rights issue this evening (Tuesday), and received demand for another NIS 100 million as part of the issuance in a unified offer to shareholders. Therefore, the fund completed the required raising of NIS 400 million, which was necessary on the way to the purchase of the majority of the shares of the public transportation company. Biram and Deutsch invested NIS 125 million in the offering themselves.
Initially, about three months ago, the tender was won by a group led by the Aloma Infrastructure Fund, which offered NIS 5.6 billion, and was joined by Migdal and the Carasso company. But then Egged set new conditions for Aloma that did not allow her to carry out the deal. Keystone, which originally came in second place with an offer of approximately NIS 4.8 billion, came into action in its place. The bids of the other groups in the tender were about a billion shekels lower.
At the end of May, Keystone purchased the Egged company at a value of NIS 4.8 billion, then it was required to provide an amount of NIS 2.8 billion for 60% of the shares. Keystone then raced against time to complete the financing. Now that the destination has been reached, the payment should be made in the coming months, in two stages.
More in-
Although this amount is lower than the early estimates for the recruitment, which were NIS 462 million, the target was reached. Of the NIS 2.8 billion that Keystone has to pay to Egged shareholders, about half (NIS 1.4 billion) was obtained in financing from the banks. Keystone also included in the financing the training funds for the teachers and kindergarten teachers in the deal (to the extent of approximately NIS 350 million). In addition to raising 400 million shekels through a rights issue, and raising bonds in the amount of 200 million shekels, the fund has a credit line from Harel Insurance in the amount of 500 million shekels that allows it to complete the deal. As part of the private share allocation, Keystone committed not to raise additional capital for a year .
Like many others, the Keystone share has suffered since the beginning of the year from the negative trend in the markets. The stock has fallen by 27.7% to date, which represents a market value of NIS 621 million for the fund, when its equity was about NIS 970 million at the end of the first quarter (with a net debt of about NIS 740 million), and when it is trading at a value of about -640 million shekels. The scope of the company’s managed assets, including the Egged deal and the Hagit power plant deal, is about NIS 2.5 billion.
Keystone’s shareholders include large institutional entities, including Altshuler Shaham, which holds 15.5% on the eve of the offering, the teachers’ and kindergarten training funds (which, as mentioned, entered as partners directly in the purchase of Egged and own 11.4% of Keystone itself), as well as Clal Insurance with 10.6% and Menorah Insurance with a share of 8.7%.
The Keystone Fund invests in the fields of energy, water and transportation. In the field of conventional energy, Keystone has holdings in the Ramat Hovav, Hagit and Beer Tovia power plants. Keystone owns 50% of the desalination plant in Ashkelon. In the field of communications, Keystone owns 30% of Cinturion, an optical fiber project between India and Europe. The company also owns 30% of the company Eranovum, which sets up charging stations for electric vehicles in Spain. Keystone also owns about 20% of the operator’s company, which operates and maintains roads, including Route 6.
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