Navitas completes NIS 500m TASE financing round

Gideon Tadmor  photo: Uria Tadmor

Gideon Tadmor's oil and gas exploration partnership issued participation units for NIS 60 million.

The Navitas Petroleum partnership, controlled by Gideon Tadmor, has raised NIS 530 million from the Israeli public in two difficult offerings of debt and equity. The money is earmarked for the partnership's oil and gas exploration in North America and consolidating its finances.

Navitas completed the public auction for its participation units before Rosh Hashanah, raising NIS 14 million, after raising NIS 32 million in the auction for investment institutions a few days earlier. In order to complete the institutional auction, in which demand was lower than expected, Navitas lowered the minimum price in the offering by nearly 10%, and the number of participation units was also cut.

At the same time, the partnership reported that the general partner, headed by chairman Tadmor, had put NIS 15 million more into the partnership "on the same terms as for the public offering," bringing the total raised to NIS 60.4 million at a company value of NIS 250 million after money. Now that the initial offering has been completed, trading in Navitas's participation units on the Tel Aviv Stock Exchange (TASE) is slated to begin this week.

A month ago, Navitas Petroleum subsidiary Navitas Buckskin Financing completed its issue of two bond series totaling NIS 472 million ($131 million). The proceeds are designated for development of the huge Buckskin discovery in the Gulf of Mexico. The site, which contains 486 million barrels of oil, is scheduled to begin production in the second half of 2019.

The bond issue also encountered difficulties. After an initial unsuccessful attempt, the money was raised only after the interest rate on the bonds was raised by 1.25% to 7.75%, the deed of trust for the bonds was changed, and the accompanying terms were improved.

Tadmor's guarantee to be released

When the financing rounds were completed, Tadmor said, "Navitas is bringing an innovative model for investment in high-quality oil and gas in North America to the Israeli stock exchange, and we believe that together with the investors, we will build a prosperous public partnership."

Tadmor controls Navitas Petroleum, together with CEO Chanan Reichman, deputy chairman Koby Katz, and deputy CEO Chanan Wolf. Investors in the partnership include Oudi Recanati, Gil Agmon, Avinoam Finkelman, Israel Goren, Zvi Barak, Daniel Jusidman, and the teachers' advanced training funds.

$5.2 million of the amount raised was earmarked for repaying part of the loan granted to the partnership by Delek Group, the outstanding balance of which was $24.1 million as of June 30, 2017. In addition, Tadmor provided a $6.3 million personal guarantee in the loan agreement, which will now be reduced to $3.5 million. $2.8 million more of the proceeds from the offering will go into a bank deposit designed to replace Tadmor's guarantee for a tender in Canada.

The Navitas partnership engages in oil and natural gas exploration, development, and production. Its activity focuses on worldwide exploration and development of existing licenses in the Gulf of Mexico, plus initial work in processing the information on these licenses. As of now, the partnership has rights in 12 projects, including 20 franchises for oil and gas drilling and exploration in the US, the Gulf of Mexico south of the shores of Texas and Louisiana, and on land in Louisiana. The partnership also has a sea exploration license in eastern Newfoundland.

Navitas also reported that insurance group Menorah Mivtachim Holdings Ltd. (TASE: MORA) will join it in gas and oil exploration deals. Navitas and Menorah Mivtachim have signed a memorandum of understanding that the latter will co-invest in such deals up to a joint investment of $150 million.

Published by Globes [online], Israel Business News - www.globes-online.com - on September 25, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Gideon Tadmor  photo: Uria Tadmor
Gideon Tadmor photo: Uria Tadmor
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