SINGAPORE, Sept. 16, 2020 /PRNewswire/ -- Kenon Holdings
Ltd.'s (NYSE: KEN) (TASE: KEN) ("Kenon") subsidiary OPC
Energy Ltd. ("OPC") announced that on September 15, 2020, a non-binding term sheet (the
"Term Sheet") was executed between OPC and Global
Infrastructure Management LLC for the acquisition of Competitive
Power Ventures group ("CPV") by OPC (the "Potential
Transaction").
CPV is engaged in the development, construction and management
of renewable energy and conventional energy (natural gas-fired)
power plants in the United States.
CPV was founded in 1999 and since then has developed and built
power plants with a total capacity of approximately 14,800MW, with
approximately 4,850MW in wind-energy and additional approximately
9,950MW in conventional power plants. CPV holds partial interests
in six operating power plants it has developed and built in recent
years, consisting of both conventional and renewable plants. In
conventional energy (state-of-the-art combine-cycle power plants
fueled by natural gas), CPV has partial interests in five plants
and CPV's proportionate share, based on its ownership percentage in
the plants, is approximately 1,290MW out of a total of 4,045MW
(reflecting full capacity of the plants). In wind energy, CPV has a
partial interest in one facility and CPV's proportionate share is
approximately 106MW out of 152MW (reflecting full capacity). CPV
also has partial interest in a gas-fired power plant in the
construction phase with a capacity of approximately 1,260MW, of
which CPV's proportionate share is approximately 220MW. In
addition, CPV has a number of projects in various stages of
development, including approximately 1,145MW of renewable energy
projects in advanced stages of development, approximately 1,100MW
of renewable energy projects in early stages of development, and a
pipeline of approximately 3,955MW of gas-fired power plants. CPV
also provides management services to power plants in various
technologies for projects it has developed as well as for third
parties. In total, CPV provides management services to power plants
with a total capacity of 10,600MW. CPV's headquarters are located
in Washington DC and in
Boston, and it employs
approximately 90 employees. Should the Purchase Agreement (as
defined below) be executed, and the Potential Transaction be
completed, OPC intends to expand its power generation operations in
the United States through the CPV
platform, by executing and expanding CPV's portfolio pipeline, with
a focus on renewable energies.
Subject to the completion of the negotiation and the execution
of a purchase agreement in connection with the Potential
Transaction (a "Purchase Agreement"), the estimated
consideration to complete the Potential Transaction, including
expected additional investments in upcoming years to fund CPV's
pipeline projects, is approximately $700-800 million, subject to certain adjustments
and terms detailed in the Term Sheet.
Should a Purchase Agreement for the Potential Transaction be
executed, the acquisition is expected to be carried out through a
partnership, in which OPC will hold approximately 70% of the
ownership interests (including the general partner), and additional
institutional/financial Israeli investor(s) will hold the remainder
of the ownership interests. OPC is under negotiation with Clal,
Migdal and Poalim Capital Markets to form the partnership, and the
parties' participation in the Potential Transaction.
The Term Sheet includes matters which will be addressed in the
Purchase Agreement, including limits on representations and
provisions for representation and warranty insurance and
arrangements in case the Potential Transaction does not close.
The closing of the Potential Transaction, to the extent the
Purchase Agreement is signed, is subject to the receipt of various
regulatory approvals and clearances in the US[1]. OPC
estimates that the receipt of approvals is expected within
approximately 3 to 6 months from the date of signing the Purchase
Agreement (to the extent signed).
The Term Sheet includes an exclusivity period of 30 days for the
completion of negotiations and the execution of a definitive
Purchase Agreement.
The sources to finance OPC's portion of the funding for the
Potential Transaction are expected to be derived from capital
raising and/or debt raising (private, public or through bank loans)
or a combination of the above, as well as available cash.
In connection with the Potential Transaction, Kenon is
considering, and has informed OPC, that in the event that OPC will
seek to raise capital from its shareholders in connection with the
Potential Transaction (if and as may be executed), then Kenon will
strongly consider participating in such capital raising, subject to
Kenon being satisfied with the terms of the capital raise and other
relevant considerations. The foregoing does not represent a
commitment on the part of Kenon to participate in any capital
raising, or impact Kenon's ability to dispose of a portion of its
shares in OPC or otherwise reduce its ownership interest in
OPC.
Caution Concerning Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to, statements
relating to the Proposed Transaction, estimated consideration to
complete the Potential Transaction, expected Purchase Agreement
terms, estimated approvals and clearances and expected timing of
receipt of approvals for closing, expected ownership interests in
the contemplated partnership, expected sources to finance OPC's
portion of the funding, including Kenon's potential participation
in a potential capital raise by OPC, and OPC's and CPV's plans
regarding expansion of their respective power generation operations
in the United States and other
non-historical matters. These statements are based on current
expectations or beliefs and are subject to uncertainty and changes
in circumstances. These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond Kenon's
control, which could cause the actual results to differ materially
from those indicated in such forward-looking statements. Such risks
include risks relating to the Proposed Transaction not being
carried out as described or at all, including expected approvals
and clearances not received within the expected timing or at all,
changes in OPC's or CPV's plans regarding US expansion, Kenon not
participating in any potential OPC capital raise and other risks
and factors including the impact of the COVID-19 outbreak and those
risks set forth under the heading "Risk Factors" in Kenon's Annual
Report on Form 20-F filed with the SEC and other filings. Except as
required by law, Kenon undertakes no obligation to update these
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Contact Info
Kenon Holdings Ltd.
Jonathan Fisch
Director, Investor Relations
jonathanf@kenon-holdings.com
Tel: +44 20 7659 4186
[1] OPC currently expects that approvals or
clearances with respect to the Potential Transaction will likely be
required under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 and from the Federal Energy Regulatory Commission, the
Committee on Foreign Investment in the
United States and the New York
State Public Service Commission.
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SOURCE Kenon Holdings Ltd.