Idan Ofer once more loses on EVs

May 15, 2024 | blog

Electric automobiles have turn into extremely common in Israel, with a flood of Chinese manufacturers hitting the market. One in each 5 automobiles offered in Israel final 12 months was electrical. Nevertheless, energy producer OPC, 55% owned by Idan Ofer’s Kenon Holdings (TASE: KEN), has not derived a lot pleasure from the ancillary area it entered three years in the past – electrical car (EV) charging. The firm has written its funding in Gnrgy, which develops, produces and installs EV charging stations, by NIS 44 million.

The fundamental causes for the difficulties of Gnrgy and different corporations within the area are that EV charging in Israel has turn into very aggressive, an absence of presidency assist, and burdensome regulation. Among the general public corporations which have entered the sphere prior to now few years are Afcon (TASE: AFHL), managed by the Shmelzer household, and Inter Industries Plus (TASE: ININ), managed by Barak Dotan, along with a bunch of privately-held corporations.

OPC Energy, headed by Giora Almogy, purchased 51% of Gnrgy in 2021 for NIS 67 million. In its 2022 financials, OPC acknowledged NIS 42 million goodwill in Gnrgy, however in final 12 months’s financials, launched in March, it wrote NIS 23 million off the funding.

OPC’s auditors acknowledged of their report that, after an examination, it was concluded that the quantity recoverable from the deal was decrease than its worth on the corporate’s books. This week, OPC reported that it could make an extra write-down of NIS 21 million in its financials for the primary quarter of 2024, in impact writing off all of the goodwill acknowledged within the acquisition deal.

Gnrgy was based in 2008 by Ran Eloya, who nonetheless heads the corporate, which, based on its web site, is energetic in six international locations. It units up charging stations for personal people and for enterprise prospects comparable to car importers, industrial facilities, gasoline stations, know-how corporations, and others. Gnrgy additionally units up public charging factors, and affords vitality administration programs for multi-story buildings.

In January this 12 months, OPC signed a non-binding memorandum of understanding with Eloya below which it had the opportunity of shopping for the latter’s 49% stake. If this proper is just not exercised, Eloya can have a set time period by which to purchase OPC’s 51%.

At the identical time, OPC agreed with an unnamed third get together on a sale of Gnrgy in opposition to an allocation of rights. This week, OPC reported that the memorandum of understanding had not resulted in a binding settlement, that Eloya now had the precise to purchase its shares, and that it could make the extra write-down on its funding.

For Ofer, this isn’t the primary funding in EVs to trigger him losses. Ten years in the past, the Better Place enterprise, led by Ofer and know-how entrepreneur Shai Agassi, collapsed after accumulating losses of NIS 3 billion since its founding in 2007. Better Place was primarily based on the idea of battery swapping installations and roadside providers. Israel Corporation, managed by Ofer, invested within the enterprise, which included growth of EVs with Renault.

The funding in Gnrgy is way extra modest, and the potential losses are correspondingly smaller. For OPC, which has a market cap of NIS 6.5 billion, and whose share value rose 11% final 12 months, Gnrgy is a really minor a part of its enterprise. OPC’s fundamental exercise is the development and operation of energy vegetation. In a latest presentation to buyers, OPC acknowledged that its portfolio consisted of building of pure gas-fueled energy vegetation, and photo voltaic and wind energy ventures, amounting to 10.1 gigawatts.

OPC had income of NIS 2.55 billion in 2023, 32% greater than in 2022, and posted a web revenue of NIS 152 million, 28% increased than within the earlier 12 months.

Published by Globes, Israel enterprise information – – on May 9, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

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