Tel Aviv, October 3, 2010. Delek Group (TASE: DLEKG, hereinafter “the Company”) announced that following on from the immediate reports issued on February 4, 2010 (reference: 2010-01-374796 reference), June 22, 2010 (reference: 2010-01-528750), June, 24 2010 (reference: 2010-01-531060), and August, 19 2010 (reference: 2010-01-591771), the Company announced that on October 1, 2010 the deal to purchase the fuel marketing activities and convenience stores of BP France was completed (including 412 gas stations, approx. 300 convenience stores and holdings in 3 terminals), and the ownership of the assets was transferred to a subsidiary of the Company, Delek France Finance SNC (a subsidiary registered in France and held in a holding chain by its subsidiaries), Delek Petroleum Ltd. (80%) and "Delek" The Israel Fuel Company Ltd. (20%) (hereinafter: Delek France, Delek Petroleum, Delek Israel, respectively).
The consideration for the transaction amounted to about Euro 175 million (including the expenses related to the deal, but subject to working capital adjustments) and was financed through bank financing loans from Delek Petroleum and Delek Israel, according to their respective proportions as follows:
A) A total of Euro 80 million, financed through a loan by a banking corporation in Israel to a foreign company (Delek BV France), the parent company of Delek France (the "Borrower"). The loan is for a period of 7 years, at a variable interest rate equal to three-month LIBOR, plus spread. For securing the payment of the loan, the shares are used as guarantees, and financing covenants have been set (which are mainly based on debt to EBITDA ratios and coverage ratios). In addition, as part of the guarantees, it was set that Delek Petroleum and Delek Israel will each give separate collaterals, each according to its pro rata holding.
B) A total of Euros 60 million were financed by a another banking corporation in Israel, through a loan that was given to Delek Petroleum, in the first stage as a short term loan, with interest of LIBOR plus spread which is guarantee by the Company. The Banking Corporation gave a commitment after completion of the necessary documentation, that set the loan for an 8 year period. For securing the above loan, Delek Petroleum committed to put shares of Delek Israel as collaterals. Delek Israel will give Delek Petroleum Guarantees back to back according to its pro rata share in the above loan of Euro 40m (i.e. a guarantee of Euro 8 million)
C) Balance of the consideration was financed through owners’ loans, which were put up by Delek Petroleum (Euro 24 million) and Delek Israel (Euro 11 million). The owner’s loans will be repaid on December 31, 2012 and will be linked to the CPI plus an interest of 5.5%.
D) The company also provided additional guarantees to third parties totaling about Euro 97 million, for the acquired operations funding needs for working capital purposes for the benefit of the Excise VAT authorities for the purpose of purchasing fuel from BP.
In addition, a guarantee of Euro 63 million was put up, for a period of two months, to ensure the working capital adjustment payment to the purchaser. In return for providing these loan guarantees, Delek Petroleum and Delek Israel will charge a fee of approximately 1.5% per year.
In addition, Delek petroleum and Delek Israel will be Eligible to receive annual management fees of Euro 1.2m, according to their pro rata share in the deal.
THIS IS A SUMMARY OF THE HEBREW ANNOUNCEMENT ISSUED TO THE TEL AVIV STOCK EXCHANGE ON OCTOBER 3, 2010. FOR FULL DETAILS PLEASE SEE:
About The Delek Group
Delek Group is the leading energy & infrastructure group based out of Israel with investments in upstream & downstream energy, water desalination and power plants globally. In addition, Delek is the number one importer & distributor of vehicles in Israel and owns insurance assets in Israel and the US. Earlier this year, Delek Group, through its subsidiaries, discovered significant quantities of high quality natural gas off the coast of Israel. Delek Group sales reached over 43 billion Israeli shekel in 2009.
For more information on Delek Group please visit www.delek-group.com.
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