delek logo 88.
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Delek USA, the energy business of Yitzhak Tshuva's Delek Group, is planning to raise $230 million in an initial public offering on the New York Stock Exchange.
"We expected them to make the offering as part of their strategy. We see significant upside potential in the US fuel operations as investors become more familiar with the opportunity there," said Joseph Wolf, analyst at UBS.
Wolf noted that the company value of Delek USA was previously estimated at between $650m. and $700m.
Delek Group filed the prospectus with the US Securities and Exchange Commission on Wednesday for its US subsidiary, whose business is divided into two main operating segments: petroleum refining and supply and retail marketing. The group's shares rose as much as 4.9 percent on Thursday on the news.
Delek said it expected to use a portion of the net proceeds from the offering to repay $52.5m. in debt, plus accrued interest, including some $42.5m., plus interest owed to affiliates. The remainder of the proceeds was expected to be used for general corporate purposes, including working capital, capital expenditures and possible acquisitions.
According to the prospectus, consolidated net sales for the unit were about $1.4 billion for the nine months ended September 30, 2005.
The lead underwriters in the offering are Lehman Brothers and Citigroup.
Separately, Africa Israel on Thursday told the Tel Aviv Stock Exchange it was considering an IPO of Africa Israel Residential Properties Ltd., its residential property development unit.
"This could be the right moment for preparing for an IPO as the real estate sector has recently seen a lot of upside in the market. An IPO could help the company expand and make more business," said Alon Glazer, analyst at Leader & Co. He estimated the value of the property unit at NIS 1.1b.
According to the Hebrew press, Africa Israel also was considering public offerings in the US for its American real estate unit and in London for its Russian real estate unit.
Conversely, the planned IPO of Internet portal Tapuz People has been delayed until further notice by the Israel Securities Authority due to press report leaks regarding Tapuz's operations, at a time when the draft prospectus was still pending. Tapuz was expected to raise between NIS 24b. and NIS 30b.