Company PetrochemicalWhich holds nearly half of the controlling shares in the company Oil refineries (BZN), seeks to receive official and binding offers, for the purpose of providing financing that will be used to exercise the company’s first right of refusal to purchase the controlling shares in BZN from the Company to Israel. This is a loan of NIS 560 million that will finance the purchase of approximately 535 million shares in ZAN (16.7% of the company).
The announcement was made last night by Petrochemicals, after earlier reporting last week that it and the trustees of its bonds had received written proposals from improving entities interested in financing the first right of refusal granted to Petrochemicals, in accordance with the provisions of the control agreement. In providing the funding is Eyal LapidotFormer CEO of Phoenix Insurance Company and CEO of Construction and Infrastructure Construction and Housing Company.
Yesterday it was reported in Globes that Lapidot is the founder and controlling owner of a new company for financing entrepreneurial projects in the real estate field called Archimedes.
In an offer to bid, Petrochemicals notes that the loan for the purchase of controlling shares inBZN From the Israel Company, a full lien will be secured on the shares that will be purchased. Petrochemical also states that dividends to be distributed in the ZN will be the source of the loan interest payments, and that the lien on the controlling shares will be the sole source of repayment of the loan principal.
However, the borrower will be given an option to purchase the pledged shares in an amount equal to the balance of the exercise loan at that time, subject to the payment offered by him for the purchase of the option. The purchase of the pledged shares can be made only after the lender receives a control permit in the ORL and becomes a partner of Petrochemicals in control of the ORL.
A petrochemical plant company has been in a state of practical insolvency for the past decade. Last week, the Company offered its bondholders a principle outline for a comprehensive debt settlement, based on the exercise of the right of refusal to purchase 16.7% of shares in ZN from the Company to Israel.
Petrochemical currently holds 15.46% of BZN shares, of which about 13.3% are defined as control shares and the balance as free shares. The Israel Company holds 24% of BZN shares, of which about 16.7% are defined as control shares and the balance as free shares.
In November last year, the Company granted Israel several institutional entities, options for 22 months, to purchase from it the free shares (7.3% of ORL) at a price of NIS 1.15 per share and a total consideration of NIS 269 million. And recently signed an agreement to sell them to the Hajaj Real Estate Development Group, which is controlled by the Tzachi and Ido Hajaj brothers.
Under the agreement, it was stipulated that Hajj Group It will purchase from the Israel Corporation its share (16.7%) in the controlling shares in BZN for NIS 588 million and at a price of NIS 1.1 per share. That the institutional bodies did not exercise the options to purchase them.
The signing of this transaction gives Petrochemicals the option of exercising the two rights set forth in the OECD control agreement – the right to join and the right of refusal. The option to step into Hajjaj’s shoes and purchase the controlling shares from the Israel Corporation at this price.
However, in view of the fact that the transaction between the company and the Hajj Group was made at a significant discount on the price of the BZN share on the stock exchange, only the right of refusal is considered economically viable for them. NIS 4.4 billion.
According to the outline of the proposed arrangement, the four series of petrochemicals’ bonds will cease from foreclosure proceedings or any other procedure for immediate repayment and / or realization of liens. Petrochemicals will exercise the right of refusal through financing from potential investors The company in BZN shares will reach approximately 32% of BZN’s share capital.
After exercising the right of refusal, Petrochemicals will offer its bondholders to receive shares in the value of their debt, or according to their share in the specific series of liens (against the write-off of the company’s debt to those holders), provided that the total amount of shares in the debt will not exceed 8%. From BZN shares. So that after the division, petrochemicals will be left with control shares at a rate of 24% of BZN (24% is the minimum threshold for BZN control).
The bondholders who waive the option to exchange debt in shares will remain with the lien they currently have on BZN shares owned by the company and in addition will be entitled to an increase in the value of the right of refusal shares.