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Shapir Engineering Sells Gas Distribution to Elad for $63 Million
Shapir Engineering signed a binding agreement on Monday to sell its natural gas distribution companies, Super NG and Super NG Hadera and HaEmekim, to Allied Group for NIS 230 million in cash. The transaction, which is subject to regulatory approvals, is expected to yield Shapir a pre-tax profit of between NIS 50 million and NIS 100 million.
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What happened
- 01Shapir Engineering agreed to sell its natural gas distribution subsidiaries to Allied Group for NIS 230 million in cash.
- 02The transaction is expected to generate a pre-tax profit of NIS 50 million to NIS 100 million for Shapir.
- 03The acquired companies, Super NG and Super NG Hadera and HaEmekim, operate gas networks in central Israel.
- 04Allied Group has a five-year option to buy Shapir's rights to future revenues for NIS 130 million plus interest.
- 05Shapir plans to recycle the capital from the sale into new infrastructure and industrial projects.
- 06According to Bizportal, the sale could resolve a regulatory obstacle regarding Shapir's stake in the Ashdod Oil Refinery.
- 07The deal requires regulatory approvals from the Minister of Energy and the Competition Authority within 120 days.
The sale includes the transfer of all shares, capital notes, and owner loans provided by Shapir. The final price will be adjusted based on the companies' debt and cash balances at closing. The two acquired companies operate gas distribution networks connecting industrial and commercial consumers to the national transmission system, with licenses in central Israel expiring in 2034 and 2038.
Under the agreement, Shapir remains entitled to conditional future payments linked to tariff increases, license extensions, and asset value. Allied Group, also referred to as Ellied or Elad Group in reports, holds a five-year option to buy out Shapir's share of these future payments for an additional NIS 130 million plus nine percent annual interest.
Shapir aims to use the capital to fund new infrastructure and industrial projects. According to Bizportal, the divestment may also resolve a regulatory obstacle regarding Shapir's stake in the Ashdod Oil Refinery. The transaction requires approvals from the Minister of Energy and the Competition Authority, and is expected to close within 120 days.
Summarized by baba from the reports of 3 newsrooms. Updated
Latest report: Calcalist. Read Calcalist’s originalThe coverage
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