Israel Petrochemical Enterprises Ltd. (TASE:PTCH) today notified the Tel Aviv Stock Exchange (TASE) that it had obtained a control permit for Oil Refineries Ltd. (TASE:ORL), more than two years after applying for it. Prime Minister Benjamin Netanyahu and Minister of Finance Yuval Steinitz signed the permit issued by the Government Companies Authority.
Under the permit, Petrochemical Enterprises is allowed to own 24% or more of Oil Refineries.
Petrochemical Enterprises chairman Jacob Gottenstein told "Globes" today, "Obtaining the control permit is an important step for Petrochemical Enterprises. We always thought that we'd ultimately get it. The holding in Oil Refineries is a strategic holding for the company, and now that we've obtained the permit, we can realize this strategy."
The control permit was delayed because of the state's objections to Petrochemical Enterprises' foreign shareholders. Initially, the state refused to grant the control permit because shareholder Glencore International AG, a Swiss investment group, also had interests in Arab countries. When Glencore sold its stake in the company, the state objected to Menatep, controlled by former oligarchs Leonid Nevzlin, Michael Brudno, and Vladimir Dubov, which shared in the controlling core of Petrochemical Enterprises' controlling shareholder Modgal Industries Ltd.
In March, Modgal controlling shareholders Gottenstein and David Federman bought out Menatep's holding in Modgal, with the result that Petrochemical Enterprises finally met the Government Companies Authority's terms for obtaining the control permit for Oil Refineries.
The control permit paves the way for the merger of Oil Refineries and Petrochemical Enterprises, which is intended to tighten control of Oil Refineries and simplify the companies' holdings structure. The two companies currently own Carmel Olefins Ltd. in equal shares, and each has cross-holdings in the other. Under the pending deal, Oil Refineries is due to buy out Petrochemical Enterprises' stake in Carmel Olefins and sell its 12.3% stake in Petrochemical Enterprises to the company.
When the deal is complete, Petrochemical Enterprises will own 35% of Oil Refineries.
Israel Corporation (TASE: ILCO) owns 45.08% of Oil Refineries.
Petrochemical Enterprises' share jumped 27% by mid-afternoon today to NIS 9. Oil Refineries' share rose 0.3% to NIS 1.51, and Israel Corp's share rose 2% to NIS 2,105.
Published by Globes [online], Israel business news - www.globes-online.com - on May 7, 2009
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