Delek slumps on revised Ithaca bond terms

Delek Group Ltd. share price has been falling sharply on the Tel Aviv Stock Exchange after market sources reported that the Israeli energy company was forced to cut the amount of bonds its Ithaca unit is raising to partly finance the acquisition of Chevron's North Sea oil and gas assets.

Delek's Ithaca unit had originally planned to raise $700 million in bonds but has cut that amount by nearly 30% to $500 million because the maximum interest rate of 9.5% was not attractive to investors.

The risk in the investment of Ithaca's bonds was brought to the attention of investors earlier this week when Israeli rating agency Midroog put Delek Group on its watch list because of the potential negative implications of the $2 billion acquisition of Chevron North Sea, which threatens Delek's A2 rating.

Delek, controlled by Yitzhak Tshuva, saw its share price fall 5.7% on the TASE yesterday and is down a further 2.7% in trading this morning.

Source: Globes