Israel's Oil Refineries nabs $900MM financing, plans hydrocracker project

Oil Refineries secured a $900 million financing framework in order to continue to implement the Company's strategic plan, as well as to service its other capital needs for four years. As part of the financing framework the Company signed an agreement of principles to receive $600 million dollars in financing from a syndicate of local banks, led by Bank Hapoalim. Additionally, the US Congress has approved a $300 million backing from Ex-Im Bank, designated for the financing of equipment to be purchased outside of Israel. Furthermore, the Company announced that it has completed all the necessary preparations to merge the activities of Carmel Olefins Ltd. ("CAOL"), defining a new management structure. 

The financing plan was approved by the Company's Board of Directors in order to service all of the Company's capital needs for four years, which is primarily comprised of the execution of the Hydrocracker project at an estimated investment of approximately $500 million as well as refinancing the Company's debt during this period. 

Yossi Rosen, Chairman of Oil Refineries: "This is the largest investment plan being undertaken in Israel this year, strengthening not only the company, but the whole Israeli economy. Oil Refineries is one of the few companies in Israel that has the ability and financial strength to undertake projects of such magnitude.”
Rosen also added: "The Company's expected transition to natural gas is an important step in the Company's strategic plan and the Board of Directors decision to approve the financing plan, in order to enable the construction of the Hydrocracker. Oil Refineries is currently well positioned to receive the natural gas after investing $45 million in preparations.” 

The Hydrocracker, due to be built at the Haifa refinery for an estimated $500 million investment, will produce mainly diesel and jet fuel. It is expected to be operational in the first half of 2012. The Hydrocracker will enable, upon operation, the production of more distillates with a higher added-value from every barrel of oil as well as increasing the refineries' flexibility in choosing the raw materials and product mix, meeting changing market conditions.

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