Oil Refineries Signs Agreement to Acquire 50% Balance of Shares in Carmel Olefins From IPE
– IPE’s Receipt of the Government Control Permit Paved the way for the
Merger Process;
– Merger Will Create a Unique Refinery in the Mediterranean Fully
Integrating Petrochemical Industries With Refining;
– World Currently at Inflection Point for Global Growth and Recovery;
Merger Will Enable Full Optimization of Margins;
– Agreement is the Culmination of Joint Efforts and Fruitful Cooperation
Between the two Companies;
– Convening Both an Annual and Extraordinary General Meeting on
2, 2009
Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter: the “Company”, “ORL”),
announcement of
Enterprises Ltd. (hereinafter: “IPE”) Board of Directors’ approved yesterday
an agreement under which ORL will acquire IPE’s share in Carmel Olefins
(hereinafter: “CAOL”). Under the approved agreement, ORL will hold 100% of
CAOL’s shares following a share exchange. The two companies reported today on
the approval of the agreement, under which the merger will take place(1).
Inter alia, the companies announced that the transaction consideration was
determined based on updated evaluations of both ORL and CAOL prepared by the
office of Prof. Swary for the companies, and was approved under the Fairness
Opinions prepared by Prof.
IPE.
According to the evaluation ratio between CAOL’s value and ORL’s value,
prepared for the purpose of the transaction by CPA Prof. Swary, ORL’s value
was estimated in the range of
was estimated in the range of
between the value of the acquired CAOL shares, and the total ORL shares to be
allotted in consideration, is in the range of 16.8% – 18.6% of ORL’s
outstanding share capital following the allotment.
On the date of closing, IPE will sell ORL its entire shareholding in
CAOL, comprising 50% of CAOL’s issued share capital, in such a way that
following the acquisition, ORL will hold 100% of CAOL’s issued share capital.
In consideration for CAOL’s shares, ORL will allocate shares to IPE shares
representing, after the allocation, 17.75% of ORL’s issued share capital.
Following completion of the transaction, IPE will hold approximately 30.7% of
ORL.
Furthermore, ORL obtained the opinion of Prof.
opinion of Prof.
represents the economic value ranges determined under the evaluation, and are
fair and reasonable.
Chairman of Oil Refineries’ Board of Directors, Mr.
receipt of the government control permit paved the way for Carmel Olefins and
Oil Refineries’ merger. This merger serves as a focal point in the strategic
plan to expand the Company’s operations in the petrochemical sector, while
leveraging the synergies to enhance profitability and drive growth. Once the
merger is completed, ORL will evolve into a unique refinery in the
Mediterranean basin, fully integrating the independent capabilities of the
petrochemical industry with its refining abilities. This is an additional and
important stage in the expansion process announced by the new shareholders,
which includes the merger of companies, acquisition of additional companies
and businesses as well as enhancing the Company’s core businesses.”
Mr. Rosen further commented on the delays in bringing natural gas to the
swiftly solve the matter and do all that is required to meet its obligations.
The industries in the
be the main consumer of the natural gas in the region, will be affected if
the natural gas pipeline does not reach the Bay area in time.”
Chief Executive Officer of Oil Refineries, Mr.
“CAOL’s acquisition by Oil Refineries will enable the maximization of
existing synergies between the refining, petrochemical and trading fields,
while significantly increasing and expanding the Company’s operations, in
these fields, in the most efficient manner, under total ownership. The world
is currently poised for recovery and growth, and this merger will enable the
Company to comprehensively optimize in a manner that raw materials will
receive higher added values. Moreover, Oil Refineries continues to promote
its plan to establish a full hydrocracker and is currently in advance stages
of arranging financing.”
cooperation to complete the efficient merger of CAOL’s operations into the
Company’s petrochemical sector. ORL will use both its accumulated merger
experience as well as obtain additional assistance from professional bodies.
The process will be managed in a manner benefiting the companies in full
cooperation and understanding of the employees. The merger benefits will
strengthen the company and benefit the employees’ future”.
Chief Executive Officer of Israel Petrochemical Enterprises, Mr.
Schwartz
fruitful cooperation between the two companies, bringing about the completion
of this important strategic move. This merger is a necessary step, bringing
together two leading companies in the energy field, combining the refining
and petrochemical areas, and serves as a key step enabling the optimization
of production processes and the maximization of company values. This merger
is made possible thanks to the privatization of Oil Refineries two years ago,
as well as the receipt of the control permit. ORL’s purchase of IPEs shares
in CAOL will enable the two companies to take advantage of the substantial
inherent merger synergies, driving growth both locally and overseas.
Following completion of the transaction, Israel Petrochemical Enterprises
will substantially increase its holding in ORL, serving as a clear show of
support in the companies’ and their management teams.”
CEO of Carmel Olefins, Mr.
Carmel Olefins into Oil Refineries activities is a necessary move, expected
to bring substantial added value to the entire group. The strengthened
platform is expected to substantially contribute to the continued growth and
is key to the future of Carmel Olefins’ employees. CAOL’s Board of Directors
both supports and places substantial emphasis on the move.”
CAOL which is located adjacent to ORL’s refinery in the Haifa Bay area,
serves as a downstream plant for the refinery. The vast majority of CAOL’s
raw materials have, to date, been sold to it by ORL. Concurrently, the
by-products created in CAOL’s production process are returned to ORL, and are
used by both ORL and Gadiv Petrochemical Industries Ltd. (hereinafter:
“Gadiv”), a wholly owned subsidiary of ORL, whose facilities are also
adjacent to ORL, in their production processes.
ORL’s acquisition of CAOL’s entire share capital will lead to the full
realization of potential synergies between the refining, aromatic and polymer
industries, and will facilitate total optimization of the production
processes in the three plants (of the Company, of CAOL and of Gadiv),
enabling total planning in the crude oil and feedstock purchase process,
optimization of the production functions in all the plants as a whole, and in
each of them in particular, as well as the direction of each material to the
site in which it will obtain the highest added value.
Furthermore, the acquisition will enable investment planning in the
refinery, the CAOL plant and the Gadiv plant, maximizing the effectiveness of
the entire system, while saving redundant costs resulting from the existence
of separate entities. Moreover, the combining of the various management and
services functions, which currently exist separately in CAOL and the Company
(information systems, trading systems, purchasing, engagements with
contractors and suppliers, finance, auditing, legal services and more) are
expected to further increase systems efficiency and cost-savings.
Annual revenues of the combined company totals approximately
billion
Annual General Meeting and Extraordinary General Meeting
On
General Meeting of the Company’s Shareholders will convene, at the Company’s
offices, located on the 26th floor of the Azrieli Centre, Square Building,
132 Menachem Begin Street,
following resolutions:
Subjects on the Agenda:
1. Discussing the Company’s financial statements and Directors’ Report
for the year ended
the Directors’ Report.
2. Re-nomination of Accounting Firm KPMG Somekh Chaikin as external
auditors until the Company’s next annual general meeting, and authorize the
Board of Directors to determine their fees.
3. Re-nomination of the Company’s current directors: Mr.
Chairman of the Board; Mr.
Zilberberg
Ronen
(Prof.
as external directors according to their nomination conditions and the terms
outlined in the Israeli Companies Law – 1999). The voting for each of the
directors will be conducted separately.
4. Amending the decision dated
compensation as follows: eliminating the right to additional compensation to
the chairman of board committees which is an unrelated director;
clarification, that if a person serves as a director in the company and\or in
a subsidiary of the company he will not be deemed as a “director related to
the controlling shareholder”, as defined in the said decision, due to his
holding office in the company and\or its subsidiaries.
5. Engagement in the transaction, the main subject matter of this
release, with the Israel Petrochemical Enterprises Ltd. (“IPE”) dated
27, 2009
interest in a transaction
6. Granting a responsibility waiver to Mr.
violation towards the company
7. Granting an letter to indemnify Mr.
For additional information with regards to the decisions on the agenda,
including the full wording of the decisions, please view the Hebrew immediate
report and the proxy statement filed on
websites of the Israeli Securities Authority (http://www.magna.isa.gov.il) or
Tel Aviv Stock Exchange (http://www.maya.tase.co.il). Furthermore, a
convenience translation of the announcement will be available on the
Company’s website, http://www.orl.co.il, under investor relations, from
About Oil Refineries Ltd.
Oil Refineries Ltd. (ORL), located in the bay area of the city of
operates
state-of-the-art industrial facilities with refining capacity of 9.8 million
tons of crude oil per year, with a Nelson complexity index of 7.4, providing
a variety of quality products used in industrial operation, transportation,
private consumption, agriculture and infrastructure. The Company is also
active in the area of Polymers (through Carmel Olefins Ltd.) and Aromatics
(through wholly-owned Gadiv Petrochemical Industries Ltd.). ORL is traded on
the Tel Aviv Stock Exchange under the ticker ORL. For additional information
please visit the Company’s website: http://www.orl.co.il
Forward Looking Statements
The above includes forward looking statements based on Company data as
well as on the Company’s plans and estimates based on this said data. The
activity, results and other data may in reality be materially different given
lack of clarity and various risks, including those outlined under risk
factors in the Company’s published financial statements and management
reports.
(1) A convenience translation from Hebrew of highlights from the detailed
announcement, filed today with the Israeli Securities Authority and Tel Aviv
Stock Exchange, will be available under the investor relations section of the
Company’s website: http://www.orl.co.il, from
Company Contact:
Rony Solonicof
Chief Economist and Head of Investor Relations
Oil Refineries
Tel: +972-4-878-8320
ContactIREn@orl.co.il
Investor Relation Contacts:
Ehud Helft \ Fiona Darmon
GK Investor Relations
Tel: +1-646-797-2868
+972-52-695-4400
info@gkir.com
SOURCE Oil Refineries Ltd