PCH may halt deal to buy more Oil Refineries shares

Petroleum Capital Holdings Ltd. (PCH) might cancel a deal with Israel Corp. (ILCO.TA) to buy an additional stake in Oil Refineries Haifa (ORL.TA) on the Tel Aviv bourse unless it receives government approval soon, the main shareholder in PCH said on Sunday.

Israeli Prime Minister Ehud Olmert and Finance Minister Abraham Hirchson had requested additional information regarding Linora, which owns 19.9 percent of PCH and is controlled by one of the world’s largest companies for natural resources.

A market source has identified the foreign company as Swiss-based commodities trader Glencore.

Scailex (SCIX.TA), which owns 80.1 percent of PCH, said the government would have another 60 days to decide on the deal following receipt of all the information regarding Linora, but the acquiring companies have protested, saying the delay could hurt Oil Refineries.

PCH and Israel Corp., a holding company, in February signed an agreement to buy an additional 85 million shares in Oil Refineries to increase their stake to 50.25 percent.

According to the agreement PCH would buy 45 percent of the additional stake, or 38.25 million shares, and Israel Corp. would buy the other 55 percent.

PCH and Israel Corp. currently own 1.005 billion shares, of which PCH owns 222.25 million or an 11.11 percent stake. Israel Corp. owns 39.14 percent.

Scailex is 50.21 percent owned by Israel’s Petrochemical Enterprises (PTCH.TA).

Information from: Reuters