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| David Federman |
Nitzan Cohen
The company is trying to raise NIS 290 million from the public.
Israel Petrochemical Enterprises Ltd. (TASE:PTCH), controlled by David Federman and Alex Pesel, today received approval from the prime minister and minister of finance to attach Oil Refineries Ltd.(TASE:ORL) shares currently encumbered in favor of Bank Hapoalim(TASE: POLI) in favor of holders of bonds to be issued this Wednesday.
The bond issue terms state that Israel Petrochemical is seeking to raise NIS 290 million from the public at an interest rate to be determined in a tender. The maximum interest rate will be 7.35% - a spread of 690 points from the corresponding interest rate on risk-free bonds. The duration of the bonds will be 3.7 years.
The new series of bonds to be issued will be backed by a senior lien on Oil Refineries shares to be released from a lien in favor of Bank Hapoalim and the Bereshit fund after the debt to these firms is paid. Interest on the new bonds will be paid yearly on September 30 in 2018-2021.
Israel Petrochemical reached a NIS 2 billion debt settlement with its creditors in 2015, in which Bank Hapoalim, Bereshit, and the bondholders could either choose to receive Oil Refineries shares or postpone their debt payment in expectation of an improvement in Oil Refineries' results.
Payment of most of the debt to the bondholders, who chose to wait, was postponed until 2023. The postponement of the debt payment to Bank Hapoalim and Bereshit was of shorter duration, which meant that Israel Petrochemical had to reached another debt rescheduling arrangement totaling NIS 470 million with the two concerns, in which the bank and the fund foreclosed 4% of Oil Refineries' shares.
Israel Petrochemical still owes NIS 157.6 million to Bank Hapoalim, NIS 105.2 million to Bereshit, and NIS 8 million to holders of its Series 4 bonds for immediate repayment.
In its financial statements, Israel Petrochemical writes that it asked Bank Hapoalim and Bereshit not to institute legal measures against it, so that it could roll over its unpaid debts onto investors through a new bond issue, the proceed from which it would use to repay its unpaid loans from Bank Hapoalim and Bereshit. Needless to say, Bank Hapoalim and Bereshit agreed.
After obtaining consent from Bank Hapoalim and Bereshit, Israel Petrochemical began the process of raising money from the public. Since the lien that Israel Petrochemical wants to give investors was on its shares in Oil Refineries, however, Israel Petrochemical needed approval for encumbering the shares. Israel Petrochemical today notified the Tel Aviv Stock Exchange (TASE) that the prime minister and the minister of finance had approved attaching the shares in favor of holders of the new bonds.
Published by Globes [online], Israel Business News - on September 4, 2017 © Copyright of Globes Publisher Itonut (1983) Ltd. 2017
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