For the first time since the crisis, Maalot S&P raises the ranking of the Delek Group – the capital market

For the first time since the outbreak of the corona crisis, the rating company S&P Maalot raises its debt rating

Fuel group
+ 7.9%

Base:10,380

opening:10,080

High:11,200

low:9,981

change:24,893,356

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. The debt rating rises from CCC to B and at the same time also raises the debt rehabilitation rating. The stock is currently soaring 7%.

Maalot sets the group rating forecast as evolving, noting that continued success in the group’s operations will allow for another positive rating action. The change in the status of Delek was made following the realization of assets, without the benefits that will accrue to the company after the sale of the land in Acre for NIS 200 million to Harel and Tidhar.

In March, the corona crisis mercilessly hit a fuel group. The market predicted a breakdown of the company and non-compliance with the debts and sent the stock down 90% (on an annual basis). The company was then so leveraged following the acquisition of Chevron’s oil assets in the North Sea that it became apparent that drastic moves had to be made to meet bond debt. Since then, the company’s situation has improved following agreements with creditors and continued liquidation of assets. Towards a solution.

Maalot notes positively the actions taken by the company in recent months, which included asset acquisitions, capital raising and significant dividends from subsidiaries that led to a drastic reduction of almost NIS 4 billion in the group’s financial debt in the past year, from NIS 9.3 billion at the beginning of 2020, to NIS 5.4 billion. Shekels.

In accordance with Maalot S & P’s rating methodology, no future flows from other operations currently being promoted by the Company’s management, such as the issuance of Ithaca, were taken into account in the rating forecast. In addition, no future dividends from subsidiaries were taken into account, and the Group’s holdings in other significant assets such as super-royalties from their whale, the balance of the holding in Delek Israel (as well as the shares that may be received in the company due to the planned split in Delek Israel). Shekels, and a real estate property in Herzliya.

As stated, even without taking into account the flows from the aforesaid operations, the company’s rating increased, in light of the actions successfully completed by the company’s management in recent months since the outbreak of the crisis which led to a significant reduction in debt. Maalot estimates that performing a capital operation in Ithaca and the group’s other core assets will also have a significant positive effect on the company’s liquidity picture for the coming year and will support a positive rating operation.

Raising Delek’s rating is a credit point in favor of Idan Wells, CEO of the holding company since December 2019. This was not a period for the new CEO who still had to manage the crisis that befell the company.

Wells: “We are pleased that S & P’s rating has been raised, which is first and foremost an expression of confidence in the significant actions we have taken and the complex moves we have made in recent months, on unprecedented scales, to meet all our commitments, improve liquidity and strengthen the group’s capital. The rating report and rating increase, as well as the decline in the Group’s bond yields in recent weeks, indicate a continued positive trend in the company’s financial position and we believe that continued progress in the additional moves we are currently promoting will also be reflected in future ratings. ”