Premium (PIH) Holdings Ltd. (TASE: PIH), controlled by Ruth Ofer (the widow of Yuli Ofer) and Nimrod Rinat, has canceled the agreement to acquire 10% of its rights of the offshore Myra and Sarah licenses from Ofer Investments Ltd. Ofer Investments will fully refund financially troubled Premium NIS 6.2 million for its expenditures to date for its share of the development of the two licenses.
Ofer Investments bought half of the 13.6% of Myra and Sarah from IPC Oil and Gas Holdings Ltd. (IPC) (TASE: IPC), giving it a 6.8% stake in the two licenses. When that agreement was signed, Yuli Ofer was still alive and controlled Ofer Investments, and gave Premium PIH an option to buy a tenth of the holding, which would give the latter a 0.68% stake in the two licenses. The option was exercised in March 2011.
In November 2011, Premium raised NIS 4.8 million to finance its share of Myra and Sarah's development, after earlier announcing that it lacked the cash needed.
Premium also announced the cancellation of a loan agreement signed in January with a third party to provide a $800,000 owners loan to Premium subsidiary Premium Energy Ltd. in exchange for 49.9% of the company. The loan agreement was subject to the approval of Ofer Investments; the cancellation of the agreement with also cancelled the loan agreement.
Premium PIH also owns real estate in Eastern Europe through Central European Estates NV (CEE) (TASE:CNERO.B1), hotels through Inventech Central Hotels Ltd. (TASE: IVTC), and computer marketing through Ivory Ltd. Premium lost NIS 15.3 million in January-September 2011 after losing NIS 92.5 million in 2010, resulting in a shareholders' equity deficit of NIS 20 million.
Premium's share price has fallen 86% since January 2011 to NIS 0.21, giving a market cap of NIS 27 million. Central European Estates has NIS 122 million in bonds, and must meet a NIS 41 million payment in August. The bonds are traded at a yield of 285%, reflecting the company's inability to repay the debt with its own resources, or those of Premium, either.
There is no trading on the Tel Aviv Stock Exchange (TASE), due to a strike.
Published by Globes [online], Israel business news - www.globes-online.com - on February 9, 2012
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