Bereshit fund loan enables Petrochemicals to meet 2012 debt

The company took the loan to meet its current loan repayments and to extend the duration of its liabilities.

Israel Petrochemical Enterprises Ltd. (TASE:PTCH) today announced that it signed an agreement with the Bereshit debt recycling fund for a NIS 120 million, as “Globes” reported last week. The company took the loan to meet its current loan repayments and to extend the duration of its liabilities. The loan will be repaid in three installments: two NIS 10 million payments on the principle in December 2014 and December 2015; and a NIS 100 million payment in September 2016.Petrochemicals is a holding company controlled by chairman Jacob Gottenstein, David Federman, and Alex Pesel through Modgal Industries Ltd. Its main holding is a 30.7% stake in Oil Refineries Ltd. (TASE:ORL). It is also the controlling shareholder in Avgol Nonwoven Industries Ltd. (TASE:AVGL), with a 23.7% stake. The company’s current debt is NIS 1.95 billion, including NIS 1.6 billion to bondholders, and the rest to banks, mostly Bank Hapoalim (TASE: POLI).

Bereshit is lending Petrochemicals a CPI-linked bond bearing 7.25%. The interest payments will be made one per quarter. Bereshit received a priority lien on 30 million Oil Refineries shares, currently worth NIS 60 million, and a secondary lien on 291 million Oil Refineries shares, on which Bank Hapoalim has the priority lien. The bank is a party to the current agreement.

Petrochemicals also awarded Bereshit a five-year option to buy two million shares (6.5% of its share capital). Half of the options have a strike price of NIS 12 per share (a 78% premium on today’s opening price), and half have a strike price of NIS 18 per share (a 166% premium).

Petrochemicals has NIS 180 million in cash and the loan will top up its reserves at NIS 300 million. The company is due to make NIS 285 million in interest and principle payments on its bonds and bank loans this year. The loan from Bereshit gives the company the wherewithal to make these payments.

Petrochemicals’ share price rose 2.6% by mid-afternoon to NIS 6.93, giving a market cap of NIS 210 million.

Published by Globes [online], Israel business news – – on February 27, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012


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