Leumi Partners, the investment arm of Bank Leumi under CEO Victor Vekert, is ending its indirect partnership in renewable energy company Nofar Energy and shifting to a direct holding, in a move expected to generate a profit of NIS 250 million to NIS 300 million. The transaction comes a little more than six months after Leumi Partners entered Nofar alongside businessman Ofer Yannai.
As part of the deal, Leumi Partners sold Yannai its entire stake in Yannai Group, the vehicle through which the two had jointly controlled Nofar. In parallel, Yannai sold Leumi Nofar shares amounting to about 5% of the company. After the transaction is completed, Yannai will hold about 28.6% of Nofar.
Nofar is also expected to repay a NIS 450 million loan provided by Leumi, using debt raised from other financial institutions. The combination of moving from an indirect stake to a direct one, together with the early repayment of the loan, is what is expected to create the NIS 250 million to NIS 300 million gain on the investment made just over half a year ago.
Since Leumi first invested, Nofar Energy’s share price has risen about 116%, and the company is now valued at roughly NIS 7.6 billion. In November, Leumi Partners said it had formed a joint company with Yannai, Ofer Yannai Group, into which most of his Nofar holdings were transferred, with Yannai holding 80% and Leumi 20%. Leumi invested NIS 150 million in that joint company and also extended the NIS 450 million loan. Vekert said the mix of equity and debt, plus Nofar’s sharp rise in value, enabled “significant value creation in record time.” Yannai said the deal reflects the “significant value creation” at Nofar, allows refinancing on far better terms, and lets the company continue its business development from a stronger financial position.
