Last updated on April 24, 2014 at 5:01 EDT

Oil Refineries Announces Implementation of new Efficiency Measures and Update on Possibility for a Full Merger

January 2, 2013

HAIFA, Israel, January 2, 2013 /PRNewswire/ –

Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter “the Company,”"ORL”), Israel’s largest
integrated refining and petrochemical group, announced yesterday:

1. As part of the Company’s work plan and 2013 budget, as discussed by the Board of
Directors, the Company will implement efficiency measures, improvements and savings in
various fields of activity in light of, among others, the current market situation,
globally and in Israel.

2. A) In this context, the Company’s Chairman and Vice Chairman announced their
initiative and decision to give up 10% of the management fees to which they are entitled,
for the year 2013. Likewise, the Company’s remaining directors (including external
directors), also announced their initiative and decision to give up 10% of the
remuneration to which they are entitled, for the year 2013.

B) In addition, the Company’s CEO and other members of the Company’s management also
announced their initiative and decision to give up 10% of the salary to which they are
entitled (with the exception for the provisions and benefits), for the year 2013.

At the end of 2013, the management fees, remuneration of directors and managers’
salaries, will automatically revert back to their level had there not been a reduction.

3. As part of the discussion of the Company’s work plan and 2013 budget, the Board
decided to approve an early retirement plan for dozens of the Company’s employees, during
the year 2013.

In addition, the Company announced that pursuant to the Company’s announcement of
September 5, 2012 concerning the Company’s Board of Directors’ instructions to assess a
full merger between the Company and its wholly-owned subsidiaries, including Carmel
Olefins Ltd (“CAOL”), and on account of the complexity of implementation of the said full
merger, the Company’s Board has directed management to assess taking the required steps to
take over CAOL’s debts to its financing banks and to its debenture holders. To that
extent, the Company intends to contact immediately the Company’s and CAOL’s banks and
debenture holders to obtain their agreement to the said procedure, including their
agreement to draw up a single set of financial criteria for all the aforementioned
creditors that shall be based upon the consolidated data of the company. Taking over
CAOL’s debts by the Company, as stated, will allow the Company to enjoy most of the
benefits of a full merger between the companies within a relatively short time frame.

In addition to the above, CAOL has received from those banks providing it with credit
their agreement to extend the validity period of the relief measures in the waivers
provided to CAOL in the past by said banks, according to the terms as stated by CAOL in
its announcement of today’s date. As part of these letters of agreement, CAOL has
undertaken to provide the banks with a guarantee from the Company or other security
satisfactory to the banks in respect to CAOL’s commitments to them, not later than April
15, 2013. The Company estimates that the process of taking over CAOL’s debts by the
Company, as described above, might be complete before the aforementioned date, and
therefore the provision of a guarantee will become superfluous. In the event that the
process of taking over the debts is not completed by that date, the Company sees the
provision of the said guarantee as an intermediary stage in the overall program to take
over CAOL’s debts as stipulated above.

The above – in respect to the Company’s assessment concerning the process whereby the
Company takes over the debts of CAOL from its creditors, formulating financial criteria
based upon the consolidated company, and timing of the above process – are forward looking
statements, based inter alia on the Company’s plans and assessments, and are dependent,
inter alia, on the agreement of CAOL’s and the Company’s financing bodies. Accordingly,
there can be no certainty in respect to the completion of the aforementioned process and
its timing.

About Oil Refineries Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates
Israel’s largest integrated refining and petrochemical group. It is one of the leading
refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical
businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a
refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index
of 7.4, providing a variety of quality products used in industrial operation,
transportation, private consumption, agriculture and infrastructure. Besides production of
fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel
Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-Oils
(through Haifa Basic Oils Ltd). The Company’s shares are listed on the Tel Aviv Stock
Exchange under the ticker ORL. For additional information please visit


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ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises
Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.

The above noted in this release includes forward-looking statements based on Company
data, as well as Company plans and estimations based on this data. The activity, results
and other data may be substantially different in reality given uncertainty and various
risks, including those discussed under risk factors in the Company’s financial statements
and Director’s report

        Company Contact:
        Rony Solonicof
        Chief Economist and Head of Investor Relations
        Tel. +972-4-878-8152
        Contact IREn@orl.co.il

        Investor Relations Contact:
        Ehud Helft / Porat Saar
        CCG Israel
        Tel. (US) +1-646-233-2161 / (Int.) +972-52-776-3687

SOURCE Oil Refineries Ltd

Source: PR Newswire