CORRECTION - Oil Refineries Ltd

Oil Refineries Ltd Announces Updates in Investment in Gadot

Oil Refineries Ltd. (TASE: ORL.TA) ("Oil Refineries Ltd" or the "Company") Israel's largest integrated refining and petrochemical group, announced that on May 6, 2012  Delek Group Ltd ("Delek") and the Company - as shareholders of Gadot Biochemical Industries Ltd  ("Gadot") - entered a non-binding memorandum of understanding with the Fimi Fund regarding a transaction of which the main points are as follows:

1. The Fimi Fund ("Fimi") will invest USD 25 million in Gadot ("the Investment") and in return will be issued share capital representing 71.5% of Gadot's post-investment share capital, and Delek will invest USD 10 million in Gadot  whereby it will hold 28.5% of Gadot's post-investment share capital.

2. At the time of closure of the transaction, Gadot's loans from and commercial debts to the existing shareholders, namely Delek and the Company, will be converted into share capital, and the Company shall transfer all its shares in Gadot to Delek.

3. In the memorandum of understanding it is agreed that Gadot will enter into a new agreement with the Company for the purchase of steam at a price to be set in advance, for a maximum period of between 4-5 years. If during the agreed period the price of steam shall rise above the said agreed price, Gadot shall pay the said price and Delek and the Company shall bear the difference in price for part of the period, in proportion to their relative holdings prior to the transaction, and for the rest of the period Delek alone will bear the difference.

4. The Fund obtained exclusivity for a period of 45 days to carry out due diligence and signature of binding agreements.

5. The memorandum of understanding is subject to approval by the Boards of Directors of each of the parties and is not binding - excluding the said undertaking of exclusivity in section 4 above.

The parties will act to sign the binding agreements within 45 days from the date of signature of the memorandum of understanding.

The Company emphasizes that there is no certainty that the binding agreements will be signed. The Company will report in a further Immediate Report following signature of binding documents between the parties, if and when they are signed.

This was a convenience translation from Hebrew.  The binding version is the Hebrew only.

About Oil Refineries Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 7.4, providing a variety of quality products used in industrial operation, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-Oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit http://www.orl.co.il.

ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.

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
Contact  [email protected] 

Investor Relations Contact:
Ehud Helft / Porat Saar
CCG Israel
Tel. (US) +1-646-233-2161 / (Int.) +972-52-776-3687
[email protected]

SOURCE Oil Refineries Ltd