Israel Electric raises 1.5 bln shekels in bonds

JERUSALEM, Sept 4 Tue Sep 4, 2012 5:33am EDT

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JERUSALEM, Sept 4 (Reuters) - The cash-strapped Israel Electric Corp (IEC) raised 1.5 billion shekels ($373 million) in government-backed bonds to help it meet higher fuel costs, the utility said on Tuesday.

IEC, Israel's state-owned electricity monopoly, said it expanded two bond series as part of a government aid package to tackle the cash crisis in part stemming from a shortage of natural gas and the need to purchase more expensive fuels.

"The capital raised enables the company to continue meeting its commitments and is a vote of confidence by the Israeli government," said IEC chairman Yiftah Ron-Tal.

IEC has accrued more than $16 billion in debt and is being kept alive by repeated government-guaranteed bond offerings, which have totalled 5.9 billion shekels ($1.47 billion) in 2012.

IEC is expected to get a boost in mid-2013 when Israel's large Tamar offshore gas field is due to begin production.

($1 = 4.02 shekels) (Reporting by Ari Rabinovitch)

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