Shikun & Binui Provides Project Transaction Updates

Shikun & Binui Provides Project Transaction Updates

AIRPORT CITY, Israel, March 15, 2018 /PRNewswire/ -- Shikun & Binui Ltd. (TASE: SKBN.TA) today made two announcement with regard to various transactions.

Government Compound Project

On March 14, 2018, the Company entered into an agreement with a third party unrelated to the Company and / or its controlling shareholder (the "Purchaser"), for the sale of all of its rights in the Concession Company of the Government Compound Project, Genari 2 (the "Project"). The project agreement signed with the Accountant General at the Ministry of Finance (the "Client") included the planning, construction, operation, maintenance and financing of a government office building in Jerusalem, including the operation and maintenance of a nearby building and parking lot, Genari 1, and an energy center (a ground area of 43,000 square meters and an underground area of 20,000 square meters including a parking lot), for a period of operation and maintenance of 22 years. As of the date of this report, construction of the project has been completed, but the project has not yet been delivered to the customer.

The transaction includes price adjustment mechanisms, among others, in case of a material adverse change in the project from the signing date to the closing date of the transaction, and a change in the scope of the services, as well as compensation mechanisms in case of non-completion of the transaction for reasons that are not dependent on the buyer.

It was further determined in the transaction documents, that the transaction will be completed at the earliest on January 1, 2019, only after the full commercial operation of the project begins (until that date, the Company will be responsible for the operation and maintenance of the project). If and to the extent that the transaction is completed (as stated, at the earliest on January 1, 2019), the transaction is expected to generate a cash flow of approximately NIS 70 million to the Company, and the Company is expected to record in its financial statements a profit (after tax) of between NIS 25-30 million.

The transaction is subject to a number of preconditions, including the receipt of approval from third parties (in particular the approval of the Antitrust Commissioner, approval of the authorities in charge of the project and the lenders who provided financing for the project), and there is no certainty that they will be completed or the date they will be completed.

Carmel Tunnel and Northern Roads Projects

Further to the immediate reports published by the Company dated November 5, 2017 and November 19, 2017, regarding the process for the sale of its rights in the Concession Companies of the Carmel Tunnel Project ("Carmelton") and a project for the establishment, operation and maintenance of roads in the North ("Northern Roads") to a limited partnership of which the Company is a general partner (hereinafter: "the Acquiring Partnership" and "the Portfolio Transaction"), the Company is pleased to announce that on March 14, 2018, the Company reached an agreement with the other shareholders in Carmelton, according to which these shareholders will waive their claims for rights of first refusal to acquire the rights of the company, in such a way as to enable progress in the proceedings to complete the Portfolio Transaction.

The waiver will take effect with the implementation of certain amendments to the purchasing partnership agreement and the Carmelton financing agreement, relating to the partnership of the purchaser (amendments which the Company believes are not precluded to be agreed upon by the partners and by the financing parties). The portfolio transaction, if and to the extent it is completed, is expected to generate a cash flow of NIS 580 million to the Company and a capital gain (after tax) of NIS 250-300 million.

It should be noted that the portfolio transaction is still contingent on a number of additional preconditions that have not yet been met, including the receipt of approval from third parties (in particular the approval of the authorities responsible for the said projects and the lenders that provided financing for these projects), and there is no certainty that they will be completed or the date they will be completed.

About the Shikun & Binui Group

The Shikun & Binui Group is a global construction and infrastructure company that operates in Israel and internationally in seven segments: 1) infrastructure and construction contracting outside of Israel; 2) infrastructure and construction contracting within Israel; 3) real estate development within Israel; 4) real estate development outside of Israel; 5) renewable energy; and 6) concessions. The Group's activities focus on large, highly complex projects carried out for entities in private and public sectors with a focus on sustainability.

    IR Contacts:

    Company                 External IR

    Inbal Uliansky          Ehud Helft

    +972 (3) 6301058        GK Investor Relations                       +1 617 418 3096


This summary announcement was prepared solely for the convenience of the reader and does not replace Shikun & Binui Ltd.'s (hereafter - "the Company") full report. The information contained in this announcement is, by its nature, incomplete. All of its contents are provided as a supplement to the Company's report, and are subject to the declarations therein stated. This announcement includes forecasts, assessments, estimates and other information relating to the Company or its subsidiaries, or to other parties or to future events and matters, the extent of whose realization is not certain and is not under the sole control of the Company (forward-looking information, as defined in the Securities Law-1968). The key facts and data serving as the basis for this information are facts and data, among others, related to the current status of the Company and its businesses, facts and data relating to the current status of the operating segments in which the Company engages in its areas of operation, and other macroeconomic facts and data known to the Company on the preparation date of this presentation.

It is understood that forward-looking information does not constitute a fact and is based solely on subjective assessments. Forward-looking information is uncertain and for the most part, is not under the Company's control. The realization or non-realization of the forward-looking information will be influenced, among others, by the risk factors that characterize the Company's operations, as well as developments in the general environment and external factors that impact the Company's operations. The Company's future results and achievements could differ significantly from those presented in this presentation. The Company is not obligated to update or modify the said forecast or assessment, and is not obligated to update this announcement. This announcement does not constitute an offer to purchase the Company's securities or an invitation to receive such offers. An investment in securities in general, and in the Company in particular, carries risk. One must take into account that past data do not necessarily indicate future performance.

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