HAIFA, Israel, June 30, 2010 /PRNewswire-FirstCall/ --
- Support from US EX-IM Bank for Additional Loans Totaling US$300 Million for the Purchase of Equipment From Abroad, was Approved by the U.S. Congress in February of This Year
Oil Refineries Ltd. (TASE: ORL.TA) ("Oil Refineries" or the "Company") and the syndicate of local banks led by Bank Hapoalim, has today signed an agreement for a loan of US$600 million, as part of a financing program of US$900 million, to continue the implementation of the Company's strategic plan and its additional credit needs until the end of 2012. The financing program also includes the backing of US EX-IM Bank for additional loans totaling US$300 million dollars, for the purchase of equipment from abroad. The EX-IM Bank backing has been approved by the United States Congress in February this year.
The financing plan has been approved by ORL's Board of Directors for ORL's general funding needs until the end of 2012 which include, first and foremost the hydrocracker project, which is expected to cost around US$500 million, and for additional investments and for refinancing of the Company's debt during this period.
Bank Hapoalim, through its business division, organized and managed the financing. Apart from Bank Haopalim, the financing group includes: Leumi Bank, Discount Bank, First International Bank, Mizrahi Bank, Union Bank, Amitim - Pension funds, Clal Insurance Company and Harel Insurance Company.
The hydrocracker which will be set up at the Haifa refinery, with an expected investment of US$500 million, whose primary products are diesel fuel and kerosene (jet fuel), is expected to be operational in early 2012. The hydrocracker unit will allow, once operated, production of more distillates with higher added value per barrel, and will increase the flexibility of the refinery in its selection of raw materials and product mix, to suit changing market conditions. Repayment of the principle of the loans will commence only 12 months after the hydrocracker begins its operations, which is sufficient time after the Company is expected to begin enjoying the added value provided by the unit.
With the establishment of the hydrocracker facility, it is expected that the Nelson Complexity Index of ORL, which currently stands at 7.4, will increase to the 9 mark. The implication of the increased index complexity is the ability to produce higher value added from each a barrel of oil.
Completion of this process depends on the fulfillment of conditions precedent up to December 31, 2010, including the signing of a detailed agreement with EX-IM Bank.
Yossi Rosen, Chairman of Oil Refineries: "This is the largest investment program carried out in the Israeli market in recent years. ORL is one of the few companies in the market with the ability and financial strength to lead a program of such magnitude. We expect that the different regulatory bodies that are involved in the project will assist in shortening the approval process in order to allow the company to establish the unit during this period where the local economy is in much need for investment and employment."
Yashar Ben Mordechai, CEO of Oil Refineries: "The plan to establish a hydrocracker unit is expected to improve the Company's competitive positioning in the Mediterranean fuel markets and strengthen the State of Israel's economy in general and the Haifa Bay Area in particular."
Shimon Gal, Head of the Business Division at Bank Hapoalim: "We are proud to have successfully arranged this financing package for Oil Refineries which will be used for investment in equipment and infrastructure, and is expected to strengthen the Company. The business division of Bank Hapoalim, met the specific financing needs of Oil Refineries, using the business division's highly professional abilities."
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 9.8 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 and Aromatics through its holdings in Carmel Olefins Ltd and Gadiv Petrochemical Industries Ltd. The Company also provides power and heat services to industrial customers in the Haifa Bay, as well as infrastructure services. Oil Refineries' major shareholders are the Israel Corporation and Israel Petrochemical Enterprises, both public companies listed on the Tel Aviv Stock Exchange. Since 2007, the Company's shares have been listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit http://www.orl.co.il.
The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's reports.
Company Contact: Rony Solonicof Chief Economist and Head of Investor Relations Tel. +972-4-878-8152 IREn@orl.co.il Investor Relations Contact: Ehud Helft / Porat Saar CCG Israel Tel. (US) +1-646-797-2868 / (Int.) +972-52-776-3687 ORL@ccgisrael.com
SOURCE Oil Refineries Ltd