Second Letter of Undertaking Issued by Israel Corp With Regard to Holdings in Oil Refineries
HAIFA, Israel, June 4/PRNewswire-FirstCall/ -- Oil Refineries Ltd. (TASE: ORL.TA) ("Oil Refineries" or the "Company")
announced that following the Press Release that it issued on May 13, 2007 and
on July 26, 2007 with regard to the irrevocable Letter of Undertaking that
The Israel Corporation Ltd. ("Israel Corporation") gave to Scailex
Corporation Ltd. and Petroleum Capital Holdings Ltd. ("Petroleum"), below is
included a convenience translation of the text of an immediate report issued
by Israel Corporation in the matter of a second Letter of Undertaking to
Petroleum and Israel Petrochemical Enterprises Ltd. ("Petrochemicals").
(The Israel Corporation Letterhead)
Re: Letter of Undertaking on the subject of the holdings in the Oil
Refineries
Further to the previous immediate report on the subject of the
Oil Refineries Ltd. ("ORL"), including the immediate report of May 10, 2007
(Document No. 2007-01-386384) ("the previous report"), regarding the
irrevocable Letter of Undertaking that the Company gave to Scailex
Corporation Ltd. ("Scailex") and Petroleum Capital Holdings Ltd.
("Petroleum") ("the First Letter of Undertaking"), to which was attached the
wording of the joint control agreement in ORL which should have come into
force under certain conditions ("the First Control Agreement") the Company
hereby announces the following:
1. On June 1, 2008, the Company gave Israel Petrochemical
Enterprises Ltd. ("Petrochemicals") and Petroleum an irrevocable Letter of
Undertaking ("the second Letter of Undertaking"), to which was attached
wording of a joint control agreement in ORL which is likely to come into
force under certain conditions that will be detailed below ("the second
Control Agreement"), and Petrochemicals approved with its signature the
directives of the second Letter of Undertaking.
2. The second Letter of Undertaking is intended to enable the
existence of certain conditions required in order to consummate the purchase
transaction of all (100%) of the issued share capital of Petroleum by
Petrochemicals from Scailex ("the Petroleum Agreement"), and to consummate
the sales transactions of all Petrochemicals' holdings in Scailex (comprising
50.06% of the issued capital of Scailex) to Suny Electronics Ltd. ("the Suny
Agreement"), and in addition to arrange the relationships between the
Company, Petrochemicals and Petroleum after the date of the execution (if at
all) of the transactions the subject of the Petroleum agreement and the Suny
agreement ("the execution date"). The main items of the second Letter of
Undertaking are detailed below.
3. The second Letter of Undertaking stipulates and clarifies
that the first Letter of Undertaking, to which was attached the wording of
the first control agreement, will continue to remain in force without any
change, as long as the Petroleum agreement will not be implemented. It also
stipulates that the realization of the transactions, the subject of the
Petroleum agreement and the Suny agreement, do not give the Company any right
to realize the first right of refusal given to it by virtue of the first
Letter of Undertaking.
4. In addition, it was agreed that should: (a) on the day of
implementation, which will apply not later than November 10, 2008, and as
part of transactions, the subject of the Petroleum agreement and the Suny
agreement, Scailex will assign and transfer to Petrochemicals all its
obligations and rights, by virtue of the provisions of the first Letter of
Undertaking, in such a way that it will not remain with any rights whatsoever
vis-a-vis the Company, and this according to the wording of the letter of
assignment attached as an appendix to the second Letter of Undertaking or
with other wording which will satisfy the Company; and (b) immediately after
the day of implementation, Petroleum will attach its signature to the second
Letter of Undertaking and then the following provisions will apply:
4.1 The validity of the first Letter of Undertaking will
expire, and the first control agreement will be nulll, and void and the
parties to the first Letter of Undertaking will have no claim or contention
against each other regarding everything connected with the first Letter of
Undertaking and the first Control Agreement.
4.2 Scailex will be exempted and released from any rights and
obligations under the provisions of the first Letter of Undertaking and the
first Control Agreement.
4.3 Petroleum will be entitled to pledge all the core control
shares in ORL held by it today, comprising 11.11% of ORL's share capital
("the present core control shares"), to ensure payment of the series of bonds
that Petroleum issued, provided that on realizing the pledge on the present
core control shares, the trustee of the bonds will be subject to the
Company's first right of refusal.
4.4 Should Petrochemicals and Petroleum receive - up to and
not later than - May 10, 2009 all the approvals required by law, including
the control permit in ORL, then an agreement in the form of the Second
Control agreement will be signed between the Company, Petrochemicals and
Petroleum.
4.5 Should Petroleum sell to a third party all the present
core control shares or should the control in Petroleum be sold to a third
party, and the Company does not exercise its first right of refusal, and
should the third party receive - up to and not later than - May 10, 2009, all
the permits required by law including the control permit in ORL, then an
agreement in the form of the second Control Agreement with the necessary
changes, will be signed between the Company and the third party.
4.6 The sale of the present core control shares and the sale
of the direct control in Petroleum, fully or partly, to a third party
including by way of realizing liens, is subject to the Company's first right
of refusal. In the event of a transfer of direct control in Petrochemicals or
a change in the direct holdings of the controlling shareholder in
Petrochemicals, in such a way that David Federman and/or his relation on the
one hand, and Yaakov Guttenstein and/or Alex Pesel on the other hand, will
discontinue being direct or indirect controlling shareholders in
Petrochemicals ("the sale of direct or indirect control in Petrochemicals"),
the Company will have the right to purchase from Petrochemicals all the
present core control shares, should they comprise the main assets of
Petrochemicals, i.e. should Petrochemicals have no other assets (apart from
the core control shares, cash and cash equivalents), whose value according to
Petrochemical's last financial statements exceeds 200 million US dollars.
This in consideration for payment to be determined by the average closing
prices of ORL's shares on the stock exchange during the sixty (60) trading
days prior to the date of delivery of the notice on the transfer of control
multiplied by the number of core control shares sold plus a 15% premium.
5. The wording of the second control agreement is similar in
nature to the wording of the first control agreement described in the
previous report, including the matter of the call option described therein,
subject to changes required due to the fact that the agreement will be
signed, if and to the extent, that the said conditions exist for its
signature, between the Company, Petrochemicals (unlike from Scailex) and
Petroleum, and, inter alia, subject to the following changes:
5.1 The second control agreement will not impose any
obligation whatsoever on Scailex and will not give it any rights whatsoever.
5.2 On realizing the lien on the present core control shares,
the trustees of the bonds will be subject only to the Company's first right
of refusal and, consequently, will be entitled to sell the present core
control shares, fully or partly, to a third party that does not have a
control permit in ORL, and this third party will not join the second control
agreement. Pledge of additional shares in the core control in ORL (in
addition to the above present core control shares) will be subject that the
realization of the pledge on the additional shares will be in such a way that
10%, at least, of the share capital of ORL will be sold as one parcel only to
a buyer who will receive a control permit and join the second control
agreement.
5.3 The sale of the direct or indirect control in
Petrochemicals will give the Company the right to purchase from Petroleum the
core control shares in ORL held by Petroleum at that time, should they be the
main assets of Petrochemicals, i.e. that Petrochemicals does not have other
assets (excluding the core control shares, cash and cash equivalents), whose
value according to Petrochemicals' last financial statements exceeds 200
million US dollars. This in consideration for the payment detailed in clause
4.6 above.
About Oil Refineries Ltd.
Oil Refineries Ltd. (ORL), located in the bay area of the city
of Haifa, operates Israel's largest oil refinery. ORL operates sophisticated
and state-of-the-art industrial facilities with refining capacity of 9
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 Aromatics and Polymers through
wholly-owned Gadiv Petrochemical Industries Ltd. and 50% owned Carmel Olefins
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.
Contacts
Company Contact: Investor Relations Contact:
Rami Sasson Ehud Helft
EVP Business Development & Capital Markets GK Investor Relations
Oil Refineries Ltd. Tel. +1-646-201-9246
Tel: +972-4-878-8114 +972-54-523-521
ContactIREn@orl.co.il info@gkir.com
Source: Oil Refineries Ltd
Contacts: Company Contact: Rami Sasson, EVP Business Development & Capital Markets, Oil Refineries Ltd., Tel: +972-4-878-8114, ContactIREn@orl.co.il; Investor Relations Contact: Ehud Helft, GK Investor Relations, Tel. +1-646-201-9246, +972-54-523-521, info@gkir.com
2008-06-04 06:15:54 0376900 PRNEWSWIRE