Israel power utility sells 3 bln shekels of bonds
Financially strapped state-run Israel Electric Corp (IEC) said on Thursday it raised 3 billion shekels ($765 million) in a bond offering as it seeks to meet higher fuel costs and avoid power outages.
IEC, Israels electricity monopoly, said the bonds sold to institutional investors were backed by the government.
Its costs soared after Egypt halted natural gas supplies in April and forced the company to turn to more expensive sources of fuel such as diesel and fuel oil. Egypt had supplied 40 percent of IECs gas needs.
The rest came from the Mari B gas field off Israels Mediterranean coast but the well was rapidly depleting so production has been limited to preserve stocks until the large Tamar prospect comes online in mid-2013.
IEC, which already had some 60 billion shekels of outstanding debt prior to the latest bond offering, earlier this week warned of power outages over the summer due to high demand for electricity - mainly air conditioning.
IEC has said it will need another 10 billion shekels to buy more expensive fuels. Electricity rates have jumped this year as a result and IEC seeks further hikes.
As part of the offering, IEC sold three series of bonds. One series raised 1.5 billion shekels, a second 1 billion and the third raised 500 million. Total demand reached 13.3 billion shekels.
The public will be allowed to also buy bonds on Sunday.
Standard & Poors rates IECs bonds "BB+". Its debt is on CreditWatch, with negative implications.
IECs bonds were 0.1 percent higher in late trading.
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