Delek Group hereby respectfully announces that the Board of Directors of the Company has directed the Company's management to examine the possibility of a strategic split in the Company's holdings, aimed at maximizing value for the Company and all of its shareholders. The outline of such a split contemplates a concentration of the Company's activity in the energy sector and oil & gas sector under a new company to be incorporated outside of Israel (the "New Company"). Dependent on the decision to complete the above mentioned transaction, the New Company shall be held by all of the existing shareholders of the Company proportionately to their respective holdings in the Company.
The Company's shares and bonds will continue to trade on the Tel Aviv Stock Exchange. Shares of the New Company will register to trade on a foreign exchange and/or on the Tel Aviv Stock Exchange, according to the Company's decision and dependant on the final process.
Within the framework of the contemplated split (if and to the extent approved and completed, the final structure of which may change), the Company shall transfer to the New Company its holdings in the following assets and/or additional assets and/or others as the Company shall decide; its holdings in Delek Energy Systems Ltd., Delek Drilling – Limited Partnership, Avner Oil Exploration – Limited Partnership, Cohen Development & Industrial Buildings Ltd. and Navitas Petroleum Ltd., as well as its rights in the Ashkelon and Noa leases (4.441%) and its right to receive royalties from the energy sector, (collectively, the "Transferred Assets"). The existing liabilities of the Company, as of the date the process of the split takes place, will be divided between the Company and between the New Company, according to and based on, amongst other things, the final framework of the split process, according to the Company's decision to complete the transaction, and based on the assets transferred to the New Company. For further securing the Company's debt obligations as stated above, and ensuring the rights of the debenture holders of the Company, the New Company and the Company will provide a guarantee from either, in respect of the said obligations, and this will be under the Company's discretion and based on the structure of the split, as the decision is made on the execution.
The process of the split, will enable the Company and the New Company to act as independent companies, each focusing on its own business, thus contributing to the exposure of the respective assets of each company to a larger and more targeted investor market in their fields of business, and improving the investors' ability to evaluate the performance and characteristics of each field of business.
It is noted that the Company intends to carry out the Split in the optimal way, for the Company and the shareholders and protection of the rights of the bond holders, pursuant to the provisions of Chapter 4 of Part E2 of the Income Tax Ordinance and subject to the conditions and restrictions set forth therein, and shall be conditioned upon the receipt of approvals therefore and receipt of the approvals required of all regulatory and other approvals required for its consummation.
This report includes forward-looking information, as defined in the Securities Law, 5728-1968. The Split in its final structure, if and to the extent approved, may not be consummated, or may be consummated in a structure different to that contemplated, inter alia due to the non-fulfillment of various conditions, including in connection with regulatory and other entities whose approval is required.
