The debt settlement in Alon Israel Oil Company Ltd. is to be presented to the court for approval. The bondholders are asking the court to approve the settlement put together by Hermetic Trust Services under section 350 of the Companies Law. The same section was used in the sale of AFI Development to Lev Leviev by Africa-Israel. It allows the court to omit the stage of a shareholders meeting and to approve an agreement without the shareholders' approval.
Under the settlement, the bondholders will receive all the shares in the company, which holds a number of subsidiaries, among them substantial companies such as Alon Natural Gas Exploration Ltd., which owns rights in gas reservoir Tamar, shares in Delek US, and Beilsol, which is itself in a complicated situation. In return, the bondholders will allow a change in Alon's debt structure so that it will switch to having positive shareholders' equity.
The settlement includes a cash payment of NIS 240 million to the bondholders, conversion of a substantia portion of the debt to capital notes, a reduction in interest rates, and rescheduling of the balance of the debt. NIS 76 million will be paid to the Israel Tax Authority, which will release the lien on the shares in Delek US, and NIS 155 will be placed in trusteeship in favor of Bank Hapoalim (TASE: POLI).
Alon's total debt to its bondholders amounts to NIS 1.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 2, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016