A month before it is required to make a NIS 150 million repayment, Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL), controlled by Yosef (Yossi) Maiman, announced today that it was calling a meeting of its bondholders in early January, at which it will request deferral of the capital repayment for two years. The company says that it is not seeking to reduce the debt, and that regular interest payments will continue. Ampal has bond debt of NIS 1 billion.
Yields on some of Ampal's bonds have reached110%, and Maiman now joins the lengthening list of leading Israeli bushiness people seeking a debt arrangement with their creditors. Maiman told "Globes" today, "We thought that it would be irresponsible to continue payments as scheduled. We have cash for a year, and we need to give time to the long-term bondholders, and to deal with renewing the flow of gas from Egypt."
Ampal's bond issues financed the purchase of shares in Egyptian gas supplier EMG from Maiman himself. In 2005-2006, Ampal paid Maiman's private company Merhav some $250 million, mainly in cash, for the EMG shares, according to a valuation of more than $2 billion for the company.
In the past year, EMG has become a source of woe for Ampal, because of a series of sabotage attacks on its gas pipeline, which began in February. Since November, the flow of gas to Israel has stopped.
Ampal justifies postponement of the bond repayment by saying that this will give it the time required to continue enhancing the value of Gadot Chemical Tankers and Terminals Ltd. and other holdings, and thus increase its future cash flows.
At the end of September, Ampal had liquid assets to a value of $108 million, of which $69 million was cash, about a third of the amount owed to the bondholders.
Published by Globes [online], Israel business news - www.globes-online.com - on December 19, 2011
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