Alony Hetz Property and Investments Ltd. (TASE: ALHE), controlled by president and CEO Nathan Hetz and chairman Aviram Wertheim, plan to spin off and float the renewable energy unit of subsidiary Amot Investments Ltd. (TASE:AMOT), Amot Energy Ltd., on the Tel Aviv Stock Exchange (TASE). They plan to raise a gross NIS 140 million in an offering of 85-90% of Amot Energy.
The offering will reduce Amot Investment's holding in Amot Energy to 10-15%, after repayment of the company's cash investment in Amot Energy in full.
Amot Energy believes that Israel's renewable energy market is limited in size it therefore plans to expand its operations overseas. Amot Investments will concentrate on its core business of income-producing property in Israel.
Alony Hetz will invest NIS 80 million in Amot Energy. Along Hetz owns 58% of Amot Investments, and will likely own about half of Amot Energy.
Nathan Hetz said that Amot Energy was founded to exploit the roofs of Amot Investments' malls, as part of their redevelopment. "After a thorough review of the solar energy market, we concluded that the synergy between Amot's real estate business and this business is low. The renewable energy market is nonetheless interesting and has great potential, especially internationally. Investment in the field in Israel and abroad requires substantial investment in shareholders' equity, including high leverage. We therefore decided to allow Amot Energy to raise the necessary capital independently from Amot's shareholders.
"The offering will enable Amot's current shareholders to benefit from Amot Energy's initial potential. When Amot Energy becomes a public company, it will operate in Israel and probably overseas as well."
Amot Energy has invested NIS 12 million in 14 solar energy projects to date. The projects are due to generate NIS 2.4 million in annual revenue. Last month, the company estimated its investment in renewable energy at NIS 250-300 million in 2011-12.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2010
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