Under the terms of the agreement, Delek will issue 6 million shares of restricted Delek US common stock to Alon Israel, an unsecured $145m promissory note payable to Alon Israel maturing in January 2021 as well as $200m of cash that will be funded with a combination of cash on hand and borrowings on new or existing credit facilities.
The company may also issue an additional 200,000 shares of its common stock to Alon Israel under certain circumstances as outlined in the agreement.
The transaction, which is subject to customary governmental and other third party approvals, is scheduled to be closed in the second half of May
Delek US signed a stockholder agreement with Alon USA before negotiating with Alon Israel.
During the first year following the closing of this transaction, Delek US will buy up to 49.99% of the Alon USA outstanding shares at its discretion and an additional ownership above this threshold will be subject to approval of Alon USA’s board of directors.
The stockholder agreement will expire on the first anniversary of the closing of this transaction, and Delek US will then have no further restrictions on ownership in Alon USA.
Delek US chairman, president and chief executive officer Uzi Yemin said: "We are excited about this opportunity to invest in Alon USA as it broadens our asset diversity while offering future growth opportunities."
