Delek Group Lists Its Leviathan Gas Field Royalties as a New Public Company from July 13

Starting July 13, a new company named "Asset Initiatives" will be publicly traded, representing Delek Group's "super royalty" from the Leviathan gas field, which will be distributed as dividends to its investors. This financial move aims to unlock previously hidden value for shareholders and remove liabilities from Delek's balance sheet that were secured against this royalty asset. The super royalty is a payment made by reservoir owners under Delek’s policy since the discovery of Israel’s gas fields, calculated as 1.5% of revenues until investment recovery and 6.5% thereafter, similar to the state's royalty on natural resource exploitation. Besides Delek, other early industry players like Cohen Development also receive this royalty.

Delek found itself in a unique position where the super royalty was recorded as an asset but with no book value, while simultaneously being pledged as collateral for a $230 million debt. To address this, Delek decided to list the royalty asset separately on the stock exchange and distribute it as dividends to its shareholders. Each Delek shareholder as of July 8 will receive one share in Asset Initiatives for every Delek share they hold, with trading of the new shares starting on July 13. Shareholders can either sell these shares or hold them to benefit from future royalty payments after debt repayment.

According to Delek, this restructuring will increase the group's equity by approximately $200 to $220 million and remove about $220 million in net liabilities from its consolidated balance sheet. CEO Idan Walles described the move as a significant milestone in Delek’s strategy to realize the potential of its core assets, develop new growth engines, and enhance shareholder value. He added that the transaction will strengthen Delek’s capital structure and financial flexibility while continuing to support value creation for shareholders.