The offer is conditional on the government dropping the separation plans.
Israel Corp’s valuation of Oil Refineries in total is about US$750 million, although an earlier government evaluation has the price of BAZAN at closer to US$500 million. The company currently holds a 26% stake in the monopoly.
The government intends to privatise the two separate parts – the Haifa and the Ashdod facilities – with the sale of the latter as a going concern. According to Haaretz, the sale of Ashdod comes on the condition the buyer continues the facility’s operations for at least a decade in order “to ensure some competition in the sector”.
The report went on to indicate Israel Corp’s plan may not work as, under the conditions laid down by Tel Aviv, the firm may only buy into one of the two facilities.
A source in Israel’s registrar of companies told the daily “some 15 companies are interested in buying the Ashdod refining plant” and the demand makes the government optimistic it can receive more than the US$140 million Ashdod was valued at. According to another insider, Tel Aviv could get between US$160 million and US$200 million.
