February 9, 2020 / 11:53 AM / in 13 days

Delek's Ithaca to set up infrastructure firm for North Sea assets

JERUSALEM, Feb 9 (Reuters) - Israel's Delek Group said on Sunday its Ithaca subsidiary had signed a non-binding deal with an investment firm to establish a new infrastructure company for Ithaca's North Sea operations.

Ithaca in late 2019 bought Chevron's North Sea oil and gas fields for $2 billion.

Under the deal, which is subject to diligence on both sides, a joint venture between Ithaca and the investment firm will purchase two of Ithaca's production platforms at an estimated value of $875 million, although the amount could rise above $1 billion, Delek said.

Delek, which plans to spin off Ithaca in a London share offering this year, did not name the investment firm, but a source close to the deal told Reuters it was BlackRock.

BlackRock was not immediately available to comment.

Ithaca will hold 40% of the new infrastructure company, while the investment firm will own 60%.

Delek said the parties planned to examine adding additional assets in the future beyond those purchased from Ithaca.

Delek CEO Idan Vales also said Ithaca should make earnings before interest, tax, depreciation and amortisation (EBITDA) of $900 million to $1 billion in 2020. (Reporting by Steven Scheer; Editing by Mark Potter)

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