Nofar Energy Seeks $165 Million for Core Solar and Storage Operations

Nofar Energy, controlled by Ofer Yanai, is reportedly looking to sell its core solar rooftop and energy storage operations in Israel for approximately 600 million shekels (about $165 million). The company has approached several entities with the offer, seeking 300 million shekels in cash and the remaining 300 million shekels as a one-year seller's loan at 6% interest. This move appears to be an effort by Yanai to reduce Nofar's high leverage and increase its cash reserves.

The business on the block represents Nofar's foundational activities, which Yanai started his career with and built the current company upon. This division, managed by Nadav Brekan and held by subsidiary Nofar Israel, comprises 130 partnerships with kibbutzim and other commercial entities across Israel. It includes around 1,554 solar systems installed on kibbutz rooftops, generating 346 megawatts, and 113 megawatt-hours of behind-the-meter storage capacity.

Nofar typically holds minority stakes in these projects, acting as the manager, operator, and maintainer in exchange for annual management fees. The sale would likely consolidate most of these entities into a single partnership, "Nofar Israel P.M.," with the rights sold as-is. The sale is surprising given its significance to Nofar Israel's business and sentimental value, especially after recent investments from Migdal Insurance and Clal Insurance, which valued Nofar Israel at over 2 billion shekels.

Despite the potential sale, Nofar Israel is preparing for an IPO within the next year, aiming for a valuation between 2.5 and 3 billion shekels. The company recently acquired significant assets, including a 47.5% stake in the Reindor power station and 92.5% of Highlight, another solar rooftop firm. Nofar Energy itself has seen its market value decrease from nearly 10 billion shekels to 5.8 billion shekels this year.