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Kenon Announces Agreement to Sell IC Power's Latin American and Caribbean Businesses

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SINGAPORE, Nov. 26, 2017 /PRNewswire/ — Kenon Holdings Ltd. (“Kenon”) (NYSE: KEN; TASE: KEN) announces that Inkia Energy Limited (“Inkia”), a wholly-owned subsidiary of IC Power Ltd. (“IC Power”), has entered into an agreement (the “SPA”) to sell all of its Latin American and Caribbean businesses (the “LatAm Businesses”) for cash consideration of $1,177 million plus excess proportionally consolidated group cash at closing above $49.9 million (as of September 30, 2017, Inkia’s proportionally consolidated group cash was approximately $192 million) to I Squared Capital (the “Buyer”), an infrastructure private equity firm. 

The initial purchase price is subject to a number of adjustments, including for changes in working capital and outstanding debt at closing compared to June 30, 2017, and an upward adjustment to the extent Inkia’s proportionally consolidated group cash at closing exceeds $49.9 million. 

As part of the transaction, the Buyer will assume Inkia’s $450 million of bonds, which were issued in November 2017.

The sale is part of Kenon’s strategy to provide its shareholders with direct access to its businesses, including through monetization of its businesses. The transaction includes only the LatAm Businesses. IC Power’s Israeli asset OPC Energy Ltd. is not being sold as part of the transaction.

The SPA contains customary representations, warranties and covenants, including covenants relating to the operations of Inkia’s LatAm Businesses during the period between signing of the SPA and closing. Inkia and the Buyer have agreed to indemnify each other for losses arising from certain breaches of representations and warranties in the SPA and for certain other liabilities, subject to time and amount limitations. Inkia’s indemnification obligations under the SPA will be secured by a pledge of 25% of the shares of OPC Energy Ltd. (TASE: OPC) and a corporate guarantee from Kenon, both for a period of three years. In addition, the transaction will include a deferral of $175 million of the purchase price in the form of a four-year $175 million deferred payment obligation accruing 8% interest, payable in kind, which can be used to set off against Inkia’s indemnification obligations to the Buyer. 

The transaction is subject to customary closing conditions, including the receipt of consents under debt facilities and other agreements, the absence of a “Material Adverse Effect” and the delivery of various closing documentation; there are no conditions for financing or anti-trust approval. The transaction is expected to close within the next several months.

The consideration that Inkia will receive in the

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