Offshore staff
TEL AVIV, Israel – Delek Group is facing pressure from one of its banks due to the volatility of capital and commodity markets brought on by the spread of the COVID-19 virus.
The company is a partner to Noble Energy in various producing gas fields offshore Israel and its subsidiary Ithaca Energy recently acquired Chevron’s UK North Sea interests.
Both have arranged loans from foreign and local banks: all bar one are secured by various collateral and include covenants linked to the prices of the company’s securities and/or of its investee companies.
According to Delek, various events have transpired that give the various banks the right to demand an increase of the collateral provided in their favor and/or cash payment as collateral and/or repayment.
One loan provided to subsidiary Delek Energy from a foreign bank - reportedly Citibank - has a current balance of $57 million and is secured by a lien in its favor on participation units representing 15% of the capital of Delek Drilling.
Due to the sudden decline in the price of the pledged units of Delek Drilling to secure this debt, the bank has demanded full repayment of the debt.
Delek Energy has responded by petitioning the Tel Aviv District Court to obtain a temporary injunction against the foreign bank to prevent it from realizing the units. This was granted and the bank must now file its response by tomorrow, March 17.
03/16/2020
