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Delek Group Ltd., Israel’s largest energy company, received an auditors’ warning about its ability to repay debt as it scrambles to placate creditors in the wake of the coronavirus pandemic.
The questions about Delek’s ability to continue as a “going concern” were included in the company’s fourth-quarter earnings report on Sunday. Delek, controlled by investor Yitzhak Tshuva, estimates it will reach a deal on the terms of its credit, and plans to raise 400 million shekels ($114 million) this year to shore up its finances, Delek said in a statement.
It’s already carried out asset sales of more than 450 million shekels that were used to pay back loans, and decided to cut capital expenditures for 2020 in half to $125 million.
Banks and bondholdershave been pressuring Delek for repayment of its debt after company shares started tanking in early March, just as the coronavirus spread to most of the world. Delek is on the hook for 2.8 billion shekels of debt this year, according to data compiled by Bloomberg.
Delek joins a host of energy firms facing a shaky future with demand for oil shrinking by 30% to 40% this year since prices for the commodity tumbled. Delek shares havedropped 70% this year.
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