News

I Squared Capital has acquired IC Power’s Latin American and Caribbean businesses from Kenon Holdings Ltd. The proceeds of the sale is estimated to be about $1.332 billion. Bank of America Merrill Lynch served as financial adviser to Kenon on the deal.

PRESS RELEASE

SINGAPORE, Jan. 1, 2018 /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 completed the sale of its Latin American and Caribbean businesses to I Squared Capital (the “Buyer”), an infrastructure private equity firm.

The sale is expected to generate proceeds of approximately $1,332 million, consisting of $1,110 million proceeds paid by the Buyer plus retained unconsolidated cash at Inkia of $222 million. This reflects the base purchase price of $1,177 million after certain adjustments, including estimated working capital, debt and cash at closing. The purchase price is subject to adjustments, including a final adjustment based on actual working capital, debt and cash amounts as of the closing date. As part of the transaction, the Buyer will assume Inkia’s $600 million of bonds, which were issued in November and December 2017.

Kenon intends to use a portion of the proceeds of the transaction to repay debt of IC Power ($43 million of net debt outstanding), and to repay its loan facility with Israel Corporation ($240 million outstanding, including accrued interest).

The consideration that Inkia received in the transaction is before estimated transaction costs, management compensation, advisor fees, other expenses and taxes, which are estimated to be in the aggregate approximately $254 million. The estimated tax payment includes taxes payable in connection with a planned restructuring of some of the companies remaining in the Kenon group, which will simplify the holding structure. As a result of this restructuring, Kenon will hold its interest in OPC Energy Ltd. (“OPC”) directly. Kenon does not expect any further tax liability in relation to any future sales of its

interest in OPC.
The proceeds from the buyer include a four year $175 million deferred payment obligation accruing 8% interest payable in kind.

The net proceeds to be distributed to Kenon, following repayment of IC Power net debt and the Israel Corporation facility, and payment of transaction costs, management compensation, advisor fees, other expenses and taxes, are expected to be $619 million.

Bank of America Merrill Lynch acted as financial advisor to the seller.

Kenon’s shareholders authorized a capital reduction to enable a potential distribution of a portion of the proceeds received from the transaction, but no determination has yet been made as to whether a distribution will be made or as to the timing or amount of any such distribution.