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Lion Oil enters $100 million term loan with Delek transaction
By Jennifer Chiou
New York, May 4 - Lion Oil Co. entered into a $100 million term loan credit facility on April 29 with Israel Discount Bank of New York, Bank Hapoalim BM and Bank Leumi USA in connection with Delek US Holdings, Inc.'s acquisition of a controlling interest in Lion Oil, according to an 8-K filing with the Securities and Exchange Commission.
Delek completed the acquisition of 53.7% of Lion's outstanding shares from Ergon, Inc. at the end of April.
The term loan comes due on April 29, 2016 and is guaranteed by Delek and its subsidiaries.
Borrowings will bear interest at Libor plus 450 basis points.
The facility has required quarterly interest payments beginning on June 30 in addition to four quarterly amortization payments of $1.5 million each starting in June and then 16 payments of $4 million each in the subsequent quarters.
The filing stated that the term loan facility is subject to customary events of default and covenant requirements.
Also, Lion Oil Trading & Transportation, Inc. entered into a reimbursement and guaranty agreement with Goldman Sachs Lending Partners, LLC, with Lion Oil and Delek as guarantors. The agreement provides for roughly $100 million of letters of credit.
Additionally on April 29, Delek Refining, Ltd. executed an amendment to its asset-backed revolving credit agreement with a consortium of lenders including Wells Fargo Capital Finance, LLC as administrative agent, the 8-K noted. The maturity date was extended to April 29, 2015 from Feb. 23, 2014, while the size was increased to $400 million from $300 million.
As a result, the ABL's accordion feature was reduced to $200 million from $300 million.
In other news, Delek US Holdings executed a $40 million subordinated term promissory note with Delek Petroleum, Ltd. The 7¼% note matures on Dec. 31, 2017. This was in conjunction with a second promissory note for $44 million executed on April 28.
Lion Oil has petroleum terminals in El Dorado, Ark. and Memphis.
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