At the instructions of Prime Minister Ariel Sharon, the state is now settling matters in dispute relating to Zim Israel Navigation and Oil Refineries . The companies are jointly owned by the state and Israel Corporation. A ''Globes'' investigation discovered that the settlement will effectively meet all of Israel Corporation's basic demands.
Ministry of Finance Accountant General Nir Gilad and Israel Corporation representatives Adv. Ram Caspi and Yitzhak Suari CPA recently agreed to a mechanism that will determine the licensing conditions for operating the two oil refineries. The mechanism will replace the franchise that expires in October 2003.
Under the arrangement, Oil Refineries will receive a 49-year lease on the land. The company will pay the state $3 million a year, gradually rising to $11.6 million, in accordance with the company's profit thresholds.
Most the discounts from which Oil Refineries has benefited to date will be cancelled, including its full exemption from import and export taxes, duties, and purchase taxes on all types of supplies (equipment and raw materials). The company's refusal rights relating to a series of decisions will also be cancelled. This last topic is still in dispute, with Oil Refineries and Israel Corporation requesting that not all their refusal rights be cancelled.
Acting Government Companies Authority director general Alex Goldengoren is simultaneously acting to implement the decisions of the ministerial privatization committee to cancel the government's decision to split Oil Refineries into two competing companies.
The "Globes" investigation discovered that the decision to cancel the split was made without consulting the Attorney General, Antitrust Authority director general or Ministry of Finance officials.
The state owns 74% of Oil Refineries and Israel Corporation owns 26%. The state is due to sell 25% of the company on the Tell Aviv Stock Exchange (TASE). This will effectively transfer control of the company to Israel Corporation without a tender or payment of a premium for the controlling interest.
Regarding Zim, Goldengoren recently decided that the shipping company's controlling shareholder, Israel Corporation, and Ofer Brothers , which owns a major global shipping company, will look for a strategic partner to buy the state's 50% stake in Zim.
At the same time, Israel Corporation will forego its refusal rights for two years. The Government Companies Authority will also accept Zim's request to buy four new ships, two of which will be leased from Ofer Brothers shipping company.
Published by Globes [online] - www.globes.co.il - on August 6, 2002