Oil Refineries Announces a Meeting of Company's Non-Publicly Traded Bond Holders

HAIFA, Israel, March 7, 2012 /PRNewswire/ --

Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter "the Company,""ORL"), Israel's largest integrated refining and petrochemical group, announced today that a meeting of the Company's non-publicly traded bond holders (securities no. 2590131, 2590123) ("the Bonds") to be convened at the Company's offices on the 26^th floor of the Azrieli Towers Square Tower Building at 132 Menachem Begin Rd., Tel-Aviv, on Tuesday, March 27, 2012, at 11:00am (Israel time); and a meeting of the Company's non-publicly traded bond holders (securities no. 2590149, 2590115, 2590107, 2590099, 2590081, 2590073) ("the Bonds") to be convened at the same place and date, at 2:00pm (Israel time).

The meeting's agenda:

1. Amendment of the Bonds' deed of trust according to the formulation attached to the Immediate Report regarding the convening of the meeting, and instructing the trustee to sign the amendment;
2. Amendment of the Bonds' deed of trust in such a way as to ensure that any notice sent on behalf of the Company or the trustee to bondholders, including the issuing of proxy statements, will be issued only by means of an Immediate Report through the Magna (electronic full disclosure) system, and it will not be necessary to advertise in two daily newspapers or to send bondholders notice by registered mail, except where advertising in the press is required by law.

Background

During the year 2010 the company signed loan agreements with the Consortium of financing funds leaded by Bank Hapoalim BM and the EX-IM bank of the USA to finance the company's strategic plan, debt recycle and other funding needs ("the Agreements"). These Agreements agreed on financial covenants different from financial covenants agreed in the Bonds' deed.

The company asks for change and update the Bond's deed so that existing financial covenants will be replaced with part of the financial covenants given in the Agreements, all as detailed below:

Amendments to the deed of trust

1. Sections 6.11 and 6.12 of the deed of trust will be deleted and the following sections will be substituted in their stead:

"6.11    In the event that the Company's equity, as reported in its quarterly or annual consolidated financial statements for each of the years detailed below, shall be less that the following sums for that year:

                                                        2017 and
    The year                   2012 2013 2014 2015 2016 later
    Minimum consolidated
    equity (USD millions)      700  725  725  750  750  750

6.12    In the event that the ratio of the Company's equity to the Company's total balance sheet as reported in its quarterly or annual consolidated financial statements for each of the years detailed below, shall be less that the following percentages for that year:

                                                        2017 and
    The year                   2012 2013 2014 2015 2016 later
    Minimum ratio of equity to
    balance sheet              17%  19%  19%  22%  22%  22%

6.12a.    In the event that the total balance of the Company's cash, cash equivalents, deposits and securities portfolio at the end of each quarter according to the Company's separate financial statements, shall be lower than USD 50 million.

6.12b    The financial criteria stipulated in section 6.11, 6.12 and 6.12a above, will be examined once every quarter according to the Company's financial statements. Notwithstanding the provisions of sections 6.11 and 6.12 above, in the event that the Company should deviate by 10% or less from one or more of the financial criteria stipulated in said sections above, such deviation will not be considered cause to make the bonds immediately due and payable, so long as the Company shall meet said financial criteria in the following quarter.

    Once each quarter, no later than 30 days following the publication of the Company's financial statements for that quarter, the Company will provide the trustee with a document signed by the Company's CFO, certifying that the Company has met the financial criteria stipulated in section 6.11 to 6.12a, and stating each of the above stated ratios on the basis of the Company's financial statements for that quarter."

1. Section 6.13 of the deed of trust will be followed by section 6.14, which will contain the following text:

"6.14    In the event that a sum of USD 25 million or more should become immediately due and payable according to the decision of the banking consortium lead by Bank Hapoalim Ltd. under the June 2010 financing agreement, or the decision of a foreign bank under the August 2010 financing agreement, guaranteed by the Export-Import Bank of the United States."

1. Section 24.1 of the deed of trust will be replaced with the following text:

"24.1    Any notice sent on behalf of the Company or the trustee to bondholders, will be issued by means of an Immediate Report through the Magna (electronic full disclosure) system, except where advertising in the press is required by law."

Amendments to Appendix B of the deed of trust

1. Section 3.2 of the negative pledge document attached to the deed of trust as Appendix B, will be replaced with the following text:

"3.2    To pledge more than 1.2 million tons of inventory, in whole or in part, for the purpose of financing the purchase of said inventory by the borrower, so long as such financing shall be non-recourse financing and its payment may only be demanded from said pledged inventory. In order to remove any doubt, it will not be possible to pledge less than 1.2 million tons of inventory."

1. All terms in this addendum will be interpreted as intended by the deed of trust.
2. In the event of any explicit contradiction between the provisions of the present amendment and the provisions of the deed of trust or its first addendum, the provisions of the present amendment shall take precedence.
3. The rest of the conditions of the deed of trust shall remain valid and unchanged.

The above is a condensed convenience translation of the Company's announcements.  Only the Hebrew versions are binding the company  

OTHER ANNOUNCEMENT

The Company is also pleased to report the appointment of a new External Director, Jonatan Shaked, which became effective March 6, 2012

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