Delek gas units obtain $240m refinancing for Yam Tethys

Morgan Stanley is heading the syndicate that is providing the loan.

Delek Group Ltd. (TASE: DLEKG) subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) have received $240 million in refinancing for Yam Tethys from a syndicate headed by Morgan Stanley & Co. International plc.

Avner and Delek Drilling will each receive a non-recourse loan of $108.6 million, and their parent company Delek Investments and Properties Ltd. will receive a loan of $22.7 million. The loan is for up to three years, depending on the rate of natural gas sales. If the sales exceed the amount set in the basic model appended to the loan agreement, the surplus proceeds can be used for early repayment of the loan at any time, and at no charge.

The dollar-denominated loan bears three-month LIBOR plus 2.75% interest. The companies will begin repaying the loan in October 2011 in eleven unequal quarterly payments based on the clearance table set by the parties, and depending on gas sales forecasts.

Delek Group owns 43% of Yam Tethys through Avner and Delek, and Noble Energy Inc. (NYSE: NBL) owns 53%. Yam Tethys supplies gas from fields offshore from Ashkelon, which are due to run dry in 2013.

Delek Group's share price 2% in morning trading to NIS 795.90, giving a market cap of NIS 9.3 billion. Avner's share price fell 1.6% to NIS 2.15, giving a market cap of NIS 7.27 billion, and Delek Drilling's share price fell 1.9% to NIS 12.11, giving a market cap of NIS 6.75 billion.

Published by Globes [online], Israel business news - - on June 9, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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