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IDT Corp. Files Registration Statement to Spin-Off Unit Holding Retail Supplier IDT Energy

August  30, 2011
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IDT Corporation, through its Genie Energy Ltd. subsidiary, has filed an initial registration statement, including an information statement, related to the previously reported anticipated spin-off of Genie Energy to IDT stockholders.

The Genie Energy segment includes competitive retail supplier IDT Energy, as well as shale oil investments in Colorado and Israel.

IDT expects to execute the spin-off in late October 2011 after the registration statement becomes effective.

In connection with the spin-off, each IDT stockholder will receive one share of Genie Class A common stock for every share of IDT Class A common stock and one share of Genie Class B common stock for every share of IDT Class B common stock. Genie will apply to have the Genie Class B common stock listed on the New York Stock Exchange under the ticker symbol GNE.

Howard Jonas, Chairman and CEO of IDT Corp. who will also sere as Chairman of the spun-off Genie Energy, will hold approximately 74.7% of the combined voting power of Genie outstanding capital stock, as of July 31.

In its informational statement, Genie Energy said that it believes that the operational and growth prospects of its businesses may best be realized by a separation from those that will remain with IDT, based on several factors including industry characteristics and the growth prospects for its retail energy services businesses.

"Specifically, we will continue the operation of our ESCO business and expect to expand into additional markets and utility regions where we see attractive opportunities," Genie Energy said.

"As an independent company, we expect that we will be able to have direct access to the capital markets. We anticipate that this direct access will improve our ability to invest in our business and continue to develop innovative new products, services and technologies, pursue strategic transactions, enhance our market recognition with investors and increase our ability to attract and retain employees," Genie Energy stated.

After the spin-off, IDT will grant Genie Energy a license to use the IDT name for the retail energy supply business.

As of April 30, 2011, IDT Energy served approximately 378,000 meters (210,000 electric and 168,000 natural gas).

Genie Energy noted that, according to April 2011 New York PSC data, approximately 20.7% (electric) and 17.6% (gas) of eligible New York customers have migrated to an ESCO.

Based on these statistics, as of January 31, 2011, IDT Energy had captured approximately 19.6% (gas) and 15.1% (electric) of the migrated customers, Genie Energy said.

At Consolidated Edison, Genie Energy said that IDT Energy has acquired approximately 23% of migrated electric customers and 24% migrated gas customers.

Genie Energy also reported that revenues from ConEdison through POR represented 50.3% of IDT Energy consolidated revenue in the fiscal year 2010. National Grid USA accounted for 21.4% of 2010 consolidated revenues, and National Grid-Keyspan accounted for 12.4% of 2010 consolidated revenues.

Claude Pupkin will serve as CEO of the spun-off Genie Energy. Pupkin has served as Chief Executive Officer of Genie since August 2011 and has been an Executive Vice President of IDT Corporation since December 2008.

 

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