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Oil Refineries downsizing

14 Oct, 2013 9:33
שלח תגובה במיילRon Steinblatt

The company will fire 240 employees, 16% of its workforce. Since the beginning of 2011, Oil Refineries has lost $315 million.

Oil Refineries Ltd. (TASE:ORL) employees will pay a price for the company's heavy losses and cash flow problem: the Haifa-based company will fire 240 of its 1,500 employees - 16% of its workforce. Channel 10 News broke the story. Oil Refineries declined to comment.

Last week, Oil Refineries' share price plummeted and it lost a quarter of its market cap, because of uncertainty about its ability to meet the payments on its debt, which totals NIS 5.5 billion.

Since the beginning of 2011, Oil Refineries has lost $315 million, for various reasons: low refining and petrochemicals margins; the delay in the arrival of natural gas and only partial deliveries of gas for a long time; production breakdowns; and the huge investment of over $500 million in the hydrocracking facility. It is not clear at this time if the company will be able to repay the debt taken to finance the facility.

Oil Refineries' parent companies - Israel Corporation (TASE: ILCO), controlled by the Ofer family, and Israel Petrochemical Enterprises Ltd. (TASE:PTCH), controlled by David Federman - withdrew $1 billion in dividends from the company between their acquisition of control in it in 2007 and 2010. This substantial sum is now badly missed in the company's cash reserves.

Published by Globes [online], Israel business news - www.globes-online.com - on October 14, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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