Oil Refineries concludes acquisition of Carmel Olefins

Israel's largest oil refiner Oil Refineries Ltd. (ORL) has completed the acquisition of balance shares of Carmel Olefins. The companies have completed the transaction announced in October 2009 regarding the signing of an agreement with Israel Petrochemical Enterprises Ltd. (IPE) to acquire IPE's share in Carmel Olefins Ltd., in exchange for the Company's allocating 17.75% of its issued share capital (following allotment). ORL now holds 100% of CAOL, while IPE increases its holding in ORL to 30.7%, and the Israel Corp. and the public will respectively hold 37.1% and 32.2% of the Company. Simultaneously, the Israeli Government has approved an amendment to the Control Permit which broadens IPE's Control Rights in ORL, which is now jointly controlled by the Israel Corp. and IPE. Chairman of Oil Refineries' Board of Directors, Mr. Yossi Rosen: "The completion of this process is a focal point in the ORL's strategic plan to expand its operations into the petrochemical sector. The consolidated company will move to strengthen its standing, by leveraging significant synergies, with a view to presenting ongoing growth. The merger will be undertaken with the full cooperation of the employees and managers of both bodies. The merger will enable us to fully leverage existing synergies between the two companies in the areas of energy, feedstocks, and organization. This step is expected to substantially contribute to the Company's business results already in 2010, and more so in the coming years, once the Hydro-cracker is completed and gas pipeline reaches ORL. The shift to natural gas use is a key step in the Company's strategic plan. Both ORL and Carmel Olefin are now prepared to receive natural gas after having invested $45 million in necessary preparations. We expect that the involvement of the Prime Minister and his office's Director General will shortly bring about an end to the delays in bringing natural gas to Haifa Bay." Chief Executive Officer of Israel Petrochemical Enterprises, Mr. Eran Schwartz: "The completion of the merger and the amendment of the Control Permit, are the result of significant steps taken by the group over the past two years, with a view to reaching this strategic and important phase. The completion of the merger will enable ORL to optimize full production and increase operating flexibility, while benefiting from its synergetic strengths." Mr. Schwartz thanked the efforts of the dedicated teams of both companies and all consultants who worked together contributing to completing the process." CAOL which is located adjacent to ORL's refinery in the Haifa Bay area, serves as a downstream plant for the refinery. The vast majority of CAOL's raw materials have, to date, been sold to it by ORL. Concurrently, the by-products created in CAOL's production process are returned to ORL, and are used by both ORL and Gadiv Petrochemical Industries Ltd. (hereinafter: "Gadiv"), a wholly owned subsidiary of ORL, whose facilities are also adjacent to ORL, in their production processes. ORL's acquisition of CAOL's entire share capital will lead to the full realization of potential synergies between the refining, aromatic and polymer industries, and will facilitate total optimization of the production processes in the three plants (of the Company, of CAOL and of Gadiv), enabling total planning in the crude oil and feedstock purchase process, optimization of the production functions in all the plants as a whole, and in each of them in particular, as well as the direction of each material to the site in which it will obtain the highest added value. Furthermore, the acquisition will enable investment planning in the refinery, the CAOL plant and the Gadiv plant, maximizing the effectiveness of the entire system, further to saving redundant costs resulting from the existence of separate entities, while taking advantage of economies of scale and increasing operating effectiveness. The annual revenues of the combined company total approximately $5.3 billion, based on Q3-09 revenues.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha