JERUSALEM Nov 7 Cash-strapped Israel Electric
Corp (IEC) plans a private offering of bonds this
month to help it meet higher fuel costs.
IEC, Israel's state-owned electric utility, said on
Wednesday it will sell 1 billion shekels ($257 million) of
non-traded bonds in the coming weeks backed by the government.
Israel's Finance Ministry said it would provide immediate
guarantees of up to 1 billion shekels to IEC to help it through
its cash flow crisis that intensified after Egypt halted
supplies of natural gas to Israel, forcing IEC to buy more
expensive fuels such as diesel and fuel oil. Egypt had supplied
40 percent of IEC's gas needs.
It noted that the guarantees were aimed at preventing
further rises in electricity rates to consumers.
IEC, which has a cash flow shortfall of about 1.5 billion
shekels, said it planned to sell another 2 billion shekels of
bonds as early as December.
Raising 3 billion shekels should allow the company to meet
its cash flow requirements through early March 2013, IEC said.
The company this year has so far raised 5.9 billion shekels
in bond offerings that has brought its total debt to more than
IEC is expected to get a boost in mid-2013 when Israel's
large Tamar offshore gas field is due to begin production.
($1 = 3.89 shekels)
(Reporting by Steven Scheer)