Alon Israel Oil Company Ltd. reports that it has an investor who will save the company from being handed over to its bondholders. After the failure of its share offering on the TASE and just before the deadline, Alon Israel, controlled by Shraga Biran, has announced that Corbin Blume, the controlling shareholder in Jaguar Resources, a company listed on the Canadian Securities Exchange, has come to the rescue by signing an agreement to invest $35 million in the Israeli company in exchange for 60% of the shares.
Alon Israel CEO Avi Geffen said, "The investment is designed to create value for Alon Israel's shareholders and bondholders. Alon Israel added, "After the investment, the company has NIS 220 million in cash, in accordance with the agreements reached with the bondholders in the company's debt arrangement. The investment agreement has been sent to the representatives of the bondholders in Israel… Corbin Blume will complete the investment through Jaguar Resources, a company listed in Canada. Blume has 24 years of experience in the energy and oil and gas exploration sector, and has been considering various investments in oil and gas in Israel for a long time, including an investment in the Tamar and Leviathan natural gas reservoirs. Corbin is being advised by the Imperial Capital investment bank about the investment."
Alon Israel collapsed under the burden of its debts, and had to reach a debt arrangement requiring it to raise at least NIS 120 million in a share offering by the beginning of October. The offering had to take place by tomorrow, less than five months after the debt arrangement was completed. The existing shareholders, Biran and the buyers organizations of the kibbutzim, were left 13.7% of the company.
Alon Israel is a holding company that has suffered many reverses in recent years as a result of its high leverage and a decline in the value of its assets. One such reverse was the collapse of the Mega retail chain, its sub-subsidiary, which led to Alon Israel's loss of control in Mega and Blue Square Real Estate Ltd. (TASE: BLSR).
Alon Israel's prospectus shows that following the completion of the debt arrangement, the group's debt to its bondholders was NIS 1.5 billion. The group also has debts of NIS 30 million to Bank Hapoalim (TASE: POLI) and NIS 103 million to the Israel Tax Authority for income tax.
Published by Globes [online], Israel Business News - www.globes-online.com - on October 1, 2017
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