The board of directors of Israel Petrochemical Enterprises Ltd has approved the sale of a 45% stake in its Avgol Ltd subsidiary to London-based private equity company Ethemba for $106.8 million, the company said late Wednesday.
An additional $16 million payment has been agreed to by the parties dependent on 2013 results. Following the sale IPE will control 21% and the remainder is traded on the Tel Aviv Stock Exchange.
Avgol is a leading global producer of non woven fabrics for the hygiene industry with manufacturing facilities in Israel, China, Europe and the US.
The company is investing $71 million in new production lines in the US and China and has plans to expand into India.
IPE, which owns a minority stake in Oil Refineries Ltd, decided on the sale in order to ease its $500 million debt burden to bondholders and local banks.
Avgol also reported its second quarter results on Wednesday, posting a 74% drop in net profit to $1.3 million from $5 million in the same quarter a year ago. Revenues rose to $80.2 million from $68 million in the second quarter of 2011.
