GLOBAL - The board of Israeli infrastructure firm Delek has demanded to see the management's plans as the firm continues to sell its global real estate assets to clear NIS1.7bn (€340m) of outstanding debt.
The firm, which is a majority owner of upstream and downstream oil and gas assets in Israel and the US, also owns property companies in the US, Israel and Europe. Delek is also 49.8% investor in a global water desalination firm.
A letter leaked to the Israeli financial press earlier this week revealed that the parent company intended to draw on the cash reserves of its real estate subsidiary via a share buyback to pay off bond payments due in September.
The move follows significant write-downs of the past few years, culminating in sales of property assets in Canada worth NIS5bn.
In recent years, write-downs on its properties cost the firm the best part of NIS3bn, leaving it with the current equity deficit of NIS1.8bn and a working capital deficit of NIS2.8bn.
Earlier this week, the firm announced that it had been requested to acknowledge a NIS1.4bn write-down on its UK car park portfolio, while another creditor announced it was to realise its rights on Delek's German property.
Delek is focusing its infrastructure investment on drilling rights across two deepwater sites with significant reserves of natural gas: the Levantine Basin and Tamar.
It also has a controlling share of 53% in Yam Tethys, the country's sole gas producer and gas supplier to the monopoly Israel Electric Company.
Chief executive Assy Bartfeld told an audience of potential investors in Israeli listed companies in London that the low-cost, high-margin Yam Tethys operation could potentially supply local demand for gas for the next 20 years. Once depleted, it will probably be converted into a strategic gas storage facility.
The first production from Tamar, in which Delek has a 31% shareholding and the development budget of $3bn (€2.1bn), is expected in the first half of 2013.
In the meantime, Bartfeld is pinning at least some of his hopes on the discovery of oil in Leviathan last year - an event he described as "the largest discovery in a decade".
In his presentation, he identified an upward trend in Israeli demand from natural gas as a result of increased power and industrial usage.
He also pointed to Delek's international downstream network, comprising 474 refineries in the US, and motorway service stations in Benelux, France, Israel and the UK, where it owns 100% of Road Chef.