ISRAMCO INC

ISRAMCO INC deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

Isramco reported completing its merger on October 25, 2019: shares were converted into $121.40 cash each (except treasury, buyer-owned and properly appraisal-exercising shares), and the company became an indirect wholly owned subsidiary of Naphtha. It asked NASDAQ to suspend trading and delist the stock, and plans to file to end its SEC reporting. Directors Joseph From, Max Pridgeon, Asaf Yarkoni, Frans Sluiter and Nir Hasson resigned; Haim Tsuff stays, with Amir Sanker and Edy Francis added. This closes the take-private deal announced in May 2019.

asset acquisition disposition

ISRAMCO INC's exchange filed to remove a class of its securities from listing.

listing compliance notice

This final amendment to the going-private disclosure reports that on October 22, 2019 stockholders approved the merger, and on October 25, 2019 it closed. Each share was converted into the right to receive $121.40 in cash, and Isramco became an indirect wholly owned subsidiary of Naphtha. Its stock stopped trading on NASDAQ, and the company intends to file to end its SEC registration. This resolves the buyout thread open since May 2019.

business combination

Isramco filed its final proxy statement on September 6, 2019, calling a special meeting for October 22, 2019 to vote on the $121.40-per-share cash merger with the Naphtha group. The board (without Haim Tsuff, who recused himself) recommends voting for it; the filing says the price is about 18.9% above the $102.10 close on March 21, 2018 and about 8.9% above the $111.50 close on May 20, 2019. This moves the buyout from preliminary to final proxy stage and sets the vote date left open earlier. Approval needs at least 75% of the voting stock and a majority of shares held outside the buyer group and Section 16 officers; unvoted shares count as votes against.

business combination

On May 20, 2019, Isramco agreed to be bought by entities of the Naphtha group controlled by Haim Tsuff, who owns about 73% of the stock, for $121.40 in cash per share. The board, with Tsuff recused and acting on a special committee's recommendation, backed the deal. It needs 75% of shares plus a majority of shares held outside the buyer group, and the buyers can walk away if more than 8% of shares are dissenting. Either side can end it if it has not closed by February 27, 2020. This is the controlling shareholder's move to buy out the minority holders.

business combination

On May 18, 2015, a new wholly owned subsidiary, Tamar Royalties LLC, signed a $120 million, eight-year term loan with Deutsche Bank Trust Company Americas as agent, secured by the company's overriding royalty interest in the Tamar gas field (1.5375%, rising to 2.7375% after project payout). The loan is non-recourse to Isramco beyond the value of that royalty interest, and Tamar Royalties may lend Isramco up to $108 million, with the stated purposes including repaying debt owed to related parties, funding acquisitions and capital spending, and general corporate use. This is the first filing to describe a way to refinance the related-party debt flagged in earlier filings, though the filing does not say which debts will be repaid.

debt financing

Isramco completed the GFB/Trans Republic purchase on March 27, 2008 for $102.9 million, resolving the pending February deal. It funded $54 million from the commercial bank loan and about $48.9 million from related party JOEL, a loan due in 4 months at LIBOR+1.25%, which JOEL intends to extend to seven years at LIBOR+6% subject to its shareholders' approval. CEO Tsuff controls JOEL and president Maimon is a JOEL director, so most of the funding came from related parties; the filing gives no detail on the working-capital portion.

asset acquisition disposition

On Feb 15, 2008 Isramco's subsidiary Jay Petroleum agreed to buy oil and gas properties in Texas, New Mexico and Oklahoma from GFB Acquisition-I and Trans Republic for about $102 million, paying a roughly $10 million deposit. The properties produce about 600 barrels of oil and 3.5 MMCF of gas a day, with closing expected March 25 or April 2, 2008. Isramco plans to fund up to 5% from working capital and the rest from loans, including a Bank of Nova Scotia commitment letter for a facility to initially borrow up to $54 million, and has a 48-month swap selling 605,016 barrels of oil at an average $90.01 and 3,424,348 MMBTU of gas at $8.51. This is a second large US purchase on borrowed money.

material agreement

On Dec 31, 2007 Isramco sold its Israeli operations and assets (including Negev 2 and Dead Sea partnership units, employees and Israeli land) to related party IOC for about $13.6 million, keeping its offshore Israel working interests. Proceeds repaid in full the IOC loan (about $12.9 million) from the Five States purchase and part of the accrued interest on the Naphtha loan. The company initially said it expected a roughly $5 million pre-tax loss on the sale (corrected in the next amendment).

asset acquisition disposition

Isramco closed the Five States purchase on March 2, 2007 for $92 million, getting about 650 wells in Texas and New Mexico. It paid $7.7 million from working capital and borrowed the rest: $42 million from Naphtha (its related-party parent group, via IOC) in three loans of $18.5M, $10.5M and $12M due 2014, 2014 and 2012 respectively by the stated terms (7-, 7- and 5-year loans), a $7 million 3-month loan from related party JOEL, and a $35.3 million Wells Fargo credit line due March 2011 at LIBOR+2% with financial covenants. This completes the deal and moves a very small company onto heavy debt, much of it owed to entities linked to CEO Tsuff.

asset acquisition disposition

Isramco and Five States signed a new agreement on Feb 20, 2007 to buy Texas and New Mexico oil and gas properties for about $92 million, replacing the $100 million deal Isramco terminated in January. Isramco paid a new $5 million deposit; with the earlier $3 million, $8 million is applied to the price and Five States keeps it as its sole remedy if the deal fails for reasons related to Isramco. Both sides release claims over the old agreement and Isramco drops its arbitration request, resolving the deposit dispute. Closing is scheduled for March 2-12, 2007. Isramco expects to pay up to $7 million from working capital and the rest from loans: a $17 million loan from related party IOC already obtained (LIBOR+5.5%, capped at 11%, due Dec 2013, secured on specified properties), plus agreements-in-principle for a $36 million secured bank loan and $32 million of unsecured related-party loans, none yet final. CEO Haim Tsuff controls IOC and president Jackob Maimon is an IOC director.

debt financing

Isramco terminated the $100 million Five States purchase on January 20, 2007, citing unmet closing conditions (title defects and not being named operator on some properties). Five States rejects this and refuses to return the $3 million deposit, and Isramco says it will take legal action, so the deal collapsed and the deposit is now in dispute.

material agreement termination

Isramco sold all shares of its cruise liner subsidiary Magic I Cruise Line to Chesny Estates, the ship's earlier lessee, for about $2.7 million on December 31, 2006. The company says it is exiting to focus mainly on oil and gas, tied to the pending $100 million Five States purchase, ending the cruise venture begun in March 2004.

material agreement

Isramco agreed on November 15, 2006 to buy oil and gas properties in Texas and New Mexico from Five States Energy for $100 million, including about 660 producing wells, and paid a $3 million deposit. It expects to fund up to 15% from working capital and has no financing commitment yet for the rest, and closing depends on conditions with a January 20, 2007 deadline, so it is a large, uncertain deal relative to the company's size.

material agreement

Isramco settled its February 2004 Los Angeles lawsuit over a joint real estate purchase, receiving $2,500,000 from certain defendants as reimbursement of its costs, with no admission of fault and mutual releases. It expects a net gain of about $2,000,000 in the first quarter of 2006, resolving the dispute.

material agreement

This continues the cruise liner story: a Isramco subsidiary leased the Mirage 1 (bought in March 2004) to Chesny Estates from April 14 to October 31, 2005 at $8,000 a day, with Chesny bearing operating costs. Isramco also gave Egged's subsidiary a guarantee of up to $1 million against Chesny's breach of a marketing agreement, backed by a $600,000 bank guarantee and a security interest from Chesny, so Isramco carries some risk if Chesny fails.

material agreement

Isramco won a bankruptcy-court auction on March 19, 2004 to buy a 270-cabin luxury cruise liner for $8,050,000, a purchase well outside oil and gas. It plans to pay from working capital plus a roughly $5 million five-year Bank Leumi loan (only a non-binding agreement-in-principle so far), plus about $750,000 for dry-docking, and is seeking a cruise operator to lease the ship.

asset acquisition disposition