Oil Refineries Ltd. (TASE:ORL) has acquired the 24.5% stake in Haifa Basic Oils Ltd. from Paz Oil Company Ltd. (TASE:PZOL) for NIS 59 million, reflecting a company value of NIS 240 million. Oil Refineries now owns 74.5% of the company.
Haifa Basic Oils is located at the Oil Refineries premises in Haifa. It produces 75,000 tons of oil products a year. Haifa Basic Oils was founded in 1965 as a joint venture between Oil Refineries, which owned 50%, and Israel's three fuel companies at the time: Paz (24.5%), Delek Group Ltd. (TASE: DLEKG) (14%), and Sonol Israel Ltd. (11.5%).
Under the terms of Paz's acquisition of the Ashdod refinery as part of Oil Refineries' privatization in 2006, Paz was required to sell its stake in Haifa Basic Oils, and deposited the shares with a trustee.
Oil Refineries said that it expects to report a capital gain on the acquisition, but has not yet determined the amount.
Oil Refineries outbid Emilia Development (OFG) Ltd. (TASE:EMDV), controlled by Oded Feller, for Haifa Basic Oils. Oil Refineries may later try to buy out its two remaining partners in the company, Delek Group and Sonol. Any such deal will probably be made at a higher company value than in the Paz deal.
Israel Corporation (TASE: ILCO) owns 37.1% of Oil Refineries and Israel Petrochemical Enterprises Ltd. (TASE:PTCH) owns 30.7%. Oil Refineries' share rose 0.5% by mid-afternoon to NIS 1.94, giving a market cap of NIS 3.71 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 4, 2010
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