Delek Group unit Ithaca to repay it NIS 800m

Delek Israel  / Photo: Shlomi Yosef , Globes

Ithaca Energy is refinancing its debt after receiving commitments of $1.22 billion in reserve-based lending.

Delek Group Ltd. (TASE: DLEKG) subsidiary Ithaca Energy Ltd. will refinance its debt, after receiving a conditional commitment for $1.22 billion reserve-based lending (RBL).

Out of the commitments it has received, Ithaca, which produces oil and gas in the North Sea, will raise $650 million in an offering of new notes which will be used for early redemption of its existing bonds. The new notes will represent senior debt of Ithaca and will be secured on a guarantee form Ithaca and its subsidiaries.

Through the refinancing, the duration of Ithaca's bond and RBL debt is prolonged until 2026, which will increase the company's financial flexibility in advance of its planned flotation on the London Stock Exchange.

After the refinancing process is complete, Ithaca will transfer NIS 800 million to its parent company Delek Group in repayment of an owner's loan. This will assist Delek Group in paying part of its commitments to its bondholders in the coming year. Delek Group, which is controlled by Yitzhak Tshuva, is traded on the Tel Aviv Stock Exchange with a market cap of NIS 3 billion, after a 73% rise in its share price in 2021 to date. Over the past three years, however, the share price is down 63%.

Ithaca's financial performance, and the share price of Delek Group, are mainly affected by the price of Brent Crude oil, which has fallen in the past few days after a sharp rise over the past year. In the past week, Brent Crude has fallen to $68.5 a barrel, against a background of fears of a slowdown in the global economic recovery because of the renewed outbreaks of Covid-19. The price of Brent Crude is however still 59% up over the past twelve months, and 32.5% up so far this year.

Published by Globes, Israel business news - en.globes.co.il - on July 20, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Delek Israel  / Photo: Shlomi Yosef , Globes
Delek Israel / Photo: Shlomi Yosef , Globes
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