Ludoil to Invest €1.3 Billion in ISAB Refinery
Italy’s Ludoil is set to invest €1.3 billion ($1.5 billion) into Sicilian oil refiner ISAB over the next five years after acquiring a 51% stake from Cypriot private equity firm GOI Energy. This acquisition returns ISAB to Italian ownership amid increased energy market volatility and disruptions in refined fuel supplies from the Middle East.
Importance of ISAB
ISAB is a crucial part of Italy’s energy infrastructure, accounting for over 20% of the country’s refining capacity. Ludoil’s investment will focus on the modernization of several mothballed processing units and the production of sustainable aviation fuel and hydrogenated vegetable oil. The acquisition received clearance from the Italian government under its golden power regime.
Impact of the Acquisition
The merger of ISAB and Ludoil will create an energy group with an estimated annual turnover of €13 billion. Ludoil, founded in 1954, will oversee ISAB’s three facilities in Sicily. Notably, ISAB has a long-term supply and offtake agreement with commodities trader Trafigura, which will continue through 2033. This agreement involves Trafigura supplying crude oil and refining inputs while purchasing about 90% of ISAB’s refined petroleum products.
Financing Details
ISAB was valued at approximately €1 billion, including debt, under the agreement with GOI Energy. The acquisition was financed with backing from Italian export credit agency SACE and assistance from banks including BPER, UniCredit, and Monte dei Paschi.
Source: Reuters
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