The investment, like other mezzanine investments by FIMI, is in two parts, said the report. FIMI has invested $18 million in Alon USA operating subsidiary Alon Brands Inc., which handles the company's retail operations, as part of a debt offering. The bonds will bear 7% annual interest, well below the interest rate at which Alon USA previously issued bonds to investors. [image-nocss]
FIMI was also given $18 million in options, exercisable for shares in either Alon USA or Alon Brands, at FIMI's discretion, the report added. Both the bonds and options are for five years. The strike price for the options is $9.70 per share, 13% below Alon USA's opening price.
FIMI bought $5 million of Alon USA shares in October 2010 as part of a $40 million offering of preferred stock. Public response to the offering was low, and Alon Group ended up buying most of the shares, said the newspaper.
Founded in 1997, FIMI is Israel's first dedicated and mezzanie buyout fund. Benefiting from its extensive financial capabilities and the exceptional experience of its powerful management team, FIMI has created a successful track record of more than 50 major transactions valued at more than $1 billion (U.S.). Currently with more than $600 million (U.S.) equity available for new investments, it is backed by its solid base of co-investors.
Alon Brands has filed a prospectus for an IPO, which it may carry out this year.
Alon Israel Oil Company Ltd. owns 76% of Alon USA, an operator of refineries. Alon Israel chairman David Wiessman directly owns 2.3% of Alon USA.
In other company news, Alon Brands, operating as the 7-Eleven licensee in West Texas and New Mexico, is offering a special military discount of 25%t on Big Gulp, coffee and Slurpee drinks at all participating 7-Eleven stores in El Paso, Abilene and Wichita Falls, said The Times Record News.
This discount will apply to anyone who is a U.S. veteran or on active duty with a military I.D., the report said.
"We want to give back to the men and women who serve in our military and support our freedom everyday," Alon Brands vice president of operations Jonathan Ketchum told the newspaper. "This is one way we can recognize the many contributions they make for us all."
Dallas-based Alon USA owns refineries in Texas, Louisiana and California. It converts oil that cannot be refined at its refineries into asphalt. The company owns a patent for high-quality asphalt made of recycled tires. Alon is the largest 7-Eleven licensee in the United States and operates more than 300 convenience stores in Texas and New Mexico. Alon markets motor fuel products under the FINA brand at these locations and at approximately 640 distributor-serviced locations.
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