Shikun & Binui Sells Energy Unit to Generation Capital for 4.5 Billion Shekels

Shikun & Binui has signed a binding agreement to sell its entire energy subsidiary, Shikun & Binui Energy, to Generation Capital for approximately 4.5 billion shekels. The deal will provide Shikun & Binui with around 3 billion shekels in cash after taxes and transaction costs. This transaction follows a prolonged control battle between Generation Capital and the Keystone fund, which at one point offered a higher cash price without conditions. The final price includes a contingent consideration mechanism, reflecting a significant increase from the initial offer.

The sale is expected to reduce Shikun & Binui's consolidated debt by about 5.5 billion shekels and increase its equity by a similar amount, driven by a capital gain exceeding 1.5 billion shekels. CEO Amit Berman described the deal as a "defining strategic event" that will transform Shikun & Binui into a nearly debt-free company, with remaining liabilities mainly project-related. The company, historically considered highly leveraged, plans to use the proceeds to accelerate business development in its core activities.

The transaction underwent extensive review by the Competition Authority and the Electricity Authority due to concerns over potential concentration of electricity production assets in one player. The sale marks a significant shift in Shikun & Binui's financial structure and strategic focus.