Israel’s Oil Refineries outlines stability plan for polymers division

20 May 2013 13:52  [Source: ICIS news]

LONDON (ICIS)--Israel’s Oil Refineries Ltd (ORL) has unveiled a plan to ensure the stability of polymers subsidiary Carmel Olefins, the oil and petrochemicals specialist said on Monday.

The plan, published last week and to be put to vote at a meeting of ORL and Carmel debt-holders and banks, involves the issue of a guarantee to repay the principal of Carmel’s liabilities for two years, a sum of around $135m (€105m), the company said.

If Carmel’s creditors agree to the proposal, they will also waive rights during the applicable period to force the immediate repayment of Carmel’s outstanding debts in the event that its debentures are downgraded.

“Such a step would likely negatively impact on [ORL] and, as a result, on the company's debenture holder,” ORL said in a statement.

According to the company, the move represents the first step in ORL taking Carmel’s debts onto its own balance sheet, subject to agreement of both company’s creditors.

As part of the stability plan, ORL would also agree to grant debt-holders in both companies the right of proportional early redemption in the event of Carmel making early repayment to its banks, and to ensure an increase in annual interest of 0.2% in the event of funds delivered to Carmel standing at in excess of a certain amount.

The exact amount required to trigger the interest rate increase was not disclosed.

ORL is a subsidiary of Israel-based investment conglomerate Israel Corp.

($1 = €0.78)

By: Tom Brown
+44 208 652 3214

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