Canadian businessperson Corbin Blume is making another attempt to take over Alon Israel Oil Company Ltd. through public company Jaguar Resources, which he controls. Jaguar Resources, listed for trading on the Toronto Stock Exchange, yesterday announced that it had signed an agreement giving it the right to buy most of Alon Israel Oil's bonds if it manages to raise $210-400 to finance the deal.
Alon Israel Oil owes NIS 1.5 billion to holders of its Series A bonds. Under the just signed agreement, Jaguar will buy Series A bonds with at least NIS 600 million in par value (51% of the series) at $0.35 (NIS 1.22) per bond - a total of NIS 735 million, provided that it succeeds in raising the money. The more money it raises, the more bonds from the series it will be able to buy.
According to the Canadian company's announcement, the agreement signed by the parties was brokered by Advocate Yaniv Bresler and the Everest underwriting firm, which was started by Rafi Lipa, Gal Amit, and Erez Goldschmidt. Both Bresler and the firm will be entitled to a commission of 2% on the deal if it is completed.
Alon Israel Oil has four main assets: 80% of the shares in Alon Natural Gas Exploration Ltd. (TASE: ALGS), which owns 4% of the Tamar natural gas reservoir; 7.3% of the shares in the Delek US Holdings Inc. (NYSE:DK) oil refineries and fuel transporter; 8% of the shares in the Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) chain of filling stations; and 29% of the shares in the company that operates Highway 6 and the Carmel Tunnels.
In early October, ownership of Alon Oil passed from Shraga Biran and the kibbutzim to the company's bondholders, after the company failed in its attempts to raise NIS 120 million, as it undertook to do in the debt arrangement signed a few months previously.
Blume's stock exchange shell
A few days before the deadline for completing the capital raising round, Alon Oil announced that investor Corbin Blume had agreed to inject $35 million (NIS 123 million) for an allocation of 60% of Alon Oil's shares through his Jaguar Resources company. The deal was not completed on time, however, and all the shares were transferred to the bond holders, and are currently held by Hermetic Trust Services, the trustee for Alon Oil's Series A bonds.
In effect, Jaguar Resources is a stock exchange shell with a miniscule market cap of 4.8 million Canadian dollars ($3.7 million). The company finished 2016 with no cash, no revenue, an equity deficit, and a going concern warning.
The company planned a $34-38 million financing round in 2017 through a share offering (at a price of 1.2 Canadian dollars per share), but this measure has not yet been carried out.
Jaguar Resources has now announced that it is renewing its private placement process and increasing its volume to $45-85 million in order to finance the acquisition of Alon Oil's bonds. The company will also allocate 6.3 million of its shares to concerns involved with the need to repay a debt of 7.6-million Canadian dollars.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 5, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017