OPC enters deal with unit of Kenon Holdings for stakes acquisition

Kenon Holdings Ltd.'s subsidiary OPC Energy Ltd. has executed an agreement with CPV Group LP, an entity in which OPC holds a 70% stake, for the acquisition of Competitive Power Ventures group from Global Infrastructure Management, LLC. CPV is engaged in the development, construction, and management of renewable energy and conventional energy (natural gas-fired) power plants in the United States.

Consideration for the acquisition is US$630 million (payable in cash), subject to post-closing adjustments based on closing date cash, working capital, and debt. Additionally, an amount in the range of US$54 million to US$95 million is payable by the Buyer in respect of CPV's equity in the Three Rivers project, which is currently under construction, which may be paid at the Buyer's option in cash or a vendor loan at terms that have been agreed between the parties.

The acquisition is subject to closing conditions including receipt of regulatory approvals and clearances, including from the Committee on Foreign Investment in the United States (CFIUS); the Hart-Scott-Rodino Act (HSR); approval of the Federal Energy Regulatory Commission; and approval of the New York Public Service Commission. OPC believes that the process of receiving all the requisite regulatory approvals and clearances may take up to six months.

On October 9, 2020, OPC signed a partnership agreement with three institutional investors in connection with the formation of OPC Power (the "Partnership") and acquisition of CPV by the Partnership. OPC is the general partner and will own 70% of the Partnership interests. The remaining Partnership interests are owned by institutional investors relating to the following entities: Clal Insurance Enterprise Holdings Ltd. Group (12.75% interest), Migdal Insurance and Financial Holdings Ltd. Group (12.75% interest), and Poalim Capital Markets (4.5% interest). The total investment obligations of all the limited partners amount to $815 million, based on their respective ownership interests, representing obligations for acquisition consideration as well as funding of additional investments in the Buyer and in CPV for implementation of certain new projects being developed by CPV. 

The acquisition may be terminated if closing conditions are not met within 180 days of the date of the agreement, which period may be extended by an additional 60 days if regulatory approvals are not obtained by the 180-day deadline.