Afcon to Raise $50 Million for Renewable Energy Arm After Failed Merger

Afcon, controlled by the Shmeltzer family with a 57.6% stake, plans to list its renewable energy division at an estimated valuation of 800 million shekels before cash. This move follows the collapse of a merger deal between Afcon's energy operations and those of the public renewable energy company Sunflare earlier this year.

The fundraising effort, led by the underwriting firm Rosario, aims to secure between 150 and 200 million shekels. The proceeds are intended to fully replenish the company's coffers and support its ongoing expansion.

Major shareholders in the new entity will include insurance companies Menora and Migdal. They will transfer their 80% stake in a joint venture for developing renewable energy projects in Europe to the new company in exchange for shares. The current valuation for the planned listing is significantly higher than the 190 million shekel valuation at which the merger with Sunflare was previously considered.

Since the merger fell through, Afcon has made substantial progress, particularly in Europe. The company currently operates renewable energy assets in Israel and Poland with an installed capacity of 83 megawatts. Additional projects in Poland and Spain, expected to add nearly 190 megawatts, are slated to come online by the end of the year.

"With over a decade of proven experience in renewable energy, we have built an extensive international operation at Afcon and a significant portfolio in Israel, Europe, and the US, including approximately 275 megawatts of income-generating assets and hundreds of megawatts in various stages of development and construction," stated Israel Reif, Chairman of Afcon. "We are currently in a strong period of development, construction, and maturation of projects, and we are working to establish Afcon Energies as a significant player in the field."

Afcon, managed by CEO David Harari and Chairman Israel Reif, is involved in infrastructure projects, electromechanical systems, communication, control, and automation. The company's stock has risen approximately 56% since the beginning of the year, marking a total increase of over 140% in the past year, bringing its market capitalization to 3.3 billion shekels.