Haifa Port Owners and State Near Billion-Shekel Financial Deal Ahead of Elections
The state and Haifa Port owners Adani-Gadot are nearing a billion-shekel deal to escrow development funds in exchange for easing restrictions on cash withdrawals.
An agreement involving nearly one billion shekels is taking shape between the state and the owners of the Haifa Port, the Adani-Gadot group, and is expected to be signed ahead of the upcoming elections. At the core of the arrangement is a financial maneuver: funds originally allocated for port development will be transferred to a dedicated escrow account, while the port owners will gain broader flexibility to withdraw remaining cash reserves from the company's vault.
Background of the Acquisition
To understand the significance of this move, one must look back at July 2022, when Adani-Gadot won the tender to acquire the Haifa Port for approximately 4 billion shekels. Their bid exceeded competing offers by roughly 1.5 billion shekels. However, the consortium acquired more than just an operational facility; the company held about 2.5 billion shekels in cash and was entirely debt-free at the time.
Nevertheless, strict conditions were imposed on the transaction. Approximately 1 billion shekels from the reserves were earmarked for infrastructure development, including a deep-water quay capable of servicing massive container ships and competing with the nearby Bay Port. Additional funds were secured for employee retirement plans. As long as the quay development was incomplete, the owners were restricted from distributing accumulated pre-acquisition cash.
The New Escrow Arrangement
Under the emerging agreement, the approximately 1 billion shekels designated for development will leave the port company's accounts and move to an escrow managed by the Israel Ports Company, ensuring the infrastructure work remains fully funded. In exchange, restrictions on distributing remaining cash reserves will be eased, potentially allowing Adani-Gadot to issue dividends and service acquisition-related debts.
The Government Companies Authority defends the arrangement, arguing it guarantees funding for the vital quay while permitting equitable relief for the private investors. Yet, critics warn that altering conditions post-tender could provoke legal challenges from losing bidders, given that Adani-Gadot outbid rivals by a wide margin.
The Government Companies Authority stated: We see no impediment to approving the matter during the election period, as the handling of this issue began long ago and is carried out by professional government officials.
With negotiations reaching final stages, Accountant General Michal Abadi-Boiangiu is expected to approve the agreement shortly, despite the political sensitivities surrounding the election calendar.
