Phoenix to invest in PowerGen at a valuation of 3.25 billion shekels
Phoenix's investment values PowerGen at 3.25 billion shekels and is expected to yield the Generation fund a profit of up to 320 million shekels. This move is a key step in financing the acquisition of Shikun & Binui Energy and strengthens PowerGen's position as a leading player in the Israeli energy market.
Phoenix is investing 234 million shekels in PowerGen, the energy company of the Generation fund, in exchange for a 7.2% stake. Phoenix will also repay financing previously provided to the group's projects in Poland, increasing its total holding in the company to 12.4%. This investment values PowerGen at 3.25 billion shekels, a substantial increase from the 1.26 billion recorded in Generation's books at the end of 2024. The current investment is expected to yield the fund a pre-tax profit of 270–320 million shekels in the second quarter.
This investment precedes the approval of the major deal to acquire Shikun & Binui Energy for 4.45 billion shekels. According to Generation's announcement, two other large institutional investors are expected to invest a total of 500–800 million shekels upon completion of the deal. Consequently, total investments will range between 734 million and 1 billion shekels.
Growth in the energy sector
PowerGen has become a rising force in the energy market. Two years ago, it held only minor stakes in power plants and projects in Europe and the USA. Today, its portfolio includes the Reindeer power plant, which has received government approval and is valued at 1.8 billion shekels, and BezeqGen, the largest private home electricity supplier in Israel, established in partnership with Bezeq and serving over 100,000 customers.
Recently, the company received consent to build the David power plant in the Beit Shemesh industrial zone in equal partnership with Shamir Energy. Furthermore, PowerGen is expected to merge with Shikun & Binui Energy, further expanding its asset base.
Phoenix's strategic shift
Phoenix has recently been adjusting its energy portfolio, having previously sold its stakes in Dorad and Reindeer. Now, Phoenix is returning to the sector through this strategic investment in PowerGen.
Generation's announcement stated: "The two deals reported today are part of the fund's strategy to close the Shikun & Binui Energy acquisition signed last week. The fund has approximately 1.8 billion shekels in cash and available facilities at its disposal. With current leverage standing at less than 10%, the fund maintains a high credit rating, allowing for the issuance of bonds to finalize the financing for the Shikun & Binui Energy deal."
