Oil Refineries Announces Outline to Ensure Stability of Carmel Olefins
HAIFA, Israel, May 20, 2013 /PRNewswire/ –
Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter “the Company,”"ORL”), Israel’s largest
integrated refining and petrochemical group, announced on May 16, 2013 that it has
presented an outline to ensure the stability of its subsidiary, Carmel Olefins (CAOL).
The published outline, which will be put to the vote at a meeting of ORL and CAOL
debenture holders, is intended to ensure both stability and control during the
subsidiary’s repayment process. As part of the agreement ORL will issue to the debenture
holders and the banks a guarantee for repayment of the principal of CAOL’s liabilities for
two years, which stand at approximately $135 million.
If ORL’s position is accepted, the provision of a guarantee to CAOL’s debenture
holders will also benefit ORL’s debenture holders since in return the CAOL debenture
holders will waive their rights, during the applicable period, to force the immediate
repayment of CAOL’s debt in the event that its debentures are downgraded. Such a step
would likely negatively impact on the Company and, as a result, on the Company’s debenture
In accordance with its policy of realizing the full potential from the Group’s merger,
ORL sees in the current move the first step in an arrangement (subject to the agreement of
its and CAOL’s creditors) whereby it would take upon itself CAOL’s debts. In ORL’s
opinion, taking on the debt as stated will strengthen the entire Bazan Group, will yield
synergies to the Company and to CAOL, and will facilitate the operational and financial
flexibility of the Bazan Group.
ORL has also agreed as part of the arrangement, inter alia, to grant the debenture
holders of ORL and CAOL the right of proportional early redemption in the event that CAOL
shall decide to make early repayment to its banks. In addition, ORL has agreed to ensure
an increase of 0.2% in annual interest to its debenture holders in the event that the
amounts delivered to CAOL shall be greater than a fixed amount, and undertake to raise
capital in the event that amount paid to CAOL exceeds $135 million.
The announcements convening the meetings of debenture holders include other
provisions, concerning convening the meetings, as well as the arrangement proposed by the
Company, and are available (in Hebrew) through the websites of the Stock Exchange, the
Israel Securities Authority and the Company’s Investor Relations website. The only binding
version of the arrangement proposed is this included in the Hebrew announcements of
convening the meetings of debenture holders.
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 9, 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
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 IREn@orl.co.il Investor Relations Contact: Ehud Helft / Porat Saar CCG Israel Tel. (US) +1-646-233-2161 / (Int.) +972-52-776-3687 firstname.lastname@example.org
SOURCE Oil Refineries Ltd