Ithaca Energy completes London flotation at $2.9b valuation

Delek Group (TASE: DLEKG), controlled by Itzhak Tshuva, completed the flotation of its Ithaca Energy subsidiary on the London Stock Exchange yesterday. The flotation took place at a company valuation of £2.5 billion ($2.9 billion), at the lower end of the range in the offering.

The offering was based on an offer for sale by Delek Group to investors in London, which means that all of the proceeds, net of underwriters’ commissions, will go to Delek Group. Delek Group offered for sale 105 million ordinary shares in Ithaca Energy, representing 10.4% of the subsidiary’s issued share capital.

The offering price was set at 250 pence, meaning total proceeds of £262.5 million ($303.6 million). A further 15 million shares are being made available by DKL Energy Limited, Ithaca’s immediate shareholder, as an over-allotment option, which, if exercised in full, will increase the number of shares in public hands to 120 million, approximately 11.9% of Ithaca Energy’s issued share capital, and increase the offering proceeds to £300 million ($345 million).

Delek Energy said that demand for the offering was $1.3 billion, which makes the chances of the underwriters’ over allotment option being exercised in full high. Ithaca Energy shares will start to be traded today on the London Stock Exchange main market under the symbol ITH.

In the flotation documents, Ithaca Energy published its intended dividend policy, according to which in it will distribute a dividend of $400 million in 2023 and $420 million in 2024.

Ithaca Energy explores for and produces gas and oil in the North Sea north-east of the Scottish coast. Most of its activity was acquired from US company Chevron three years ago. The value of the company on Delek Group’s books is $2.3 billion. In the past year it has benefitted from the sharp rise in the global prices of oil and gas, which assisted it in completing the flotation.

For the first half of 2022, Ithaca Energy reported 113% growth in revenue, in comparison with the first half of 2021, to $1.36 billion and a 139% increase in EBITDAX (earnings before interest, taxation, depreciation, amortization, and exploration) to $904 million. Net profit was thirteen times higher, at $1.47 billion, thanks to one-time profits from acquisitions.

Besides Ithaca Energy, Delek Group holds 55% of the NewMed Energy (TASE: NWMD) partnership (formerly Delek Drilling), which is active in gas exploration and production in the Mediterranean Sea and holds 45.3% of the Leviathan reservoir in Israeli waters and 30% of the Aphrodite reservoir off Cyprus. NewMed is listing on the London Stock Exchange through a reverse merger with UK company Capricorn Energy plc. This will give Delek Energy control of two British energy companies.

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NewMed Energy reported today that it had signed a non-binding memorandum of understanding with German company Uniper to examine the possibility of cooperating on the supply of LNG (liquefied natural gas) in both the short and long terms, and on producing blue and green hydrogen.

Published by Globes, Israel business news – en.globes.co.il – on November 9, 2022.

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