Bondholders accuse Ampal of financial terrorism

"The company lost NIS 300 million in three years, while its executives pocketed NIS 80 million in salaries."

"In addition to the attacks on the gas pipeline, there was another attack - by a company which lost NIS 300 million in three years, while its executives pocketed NIS 80 million in salaries. This resembles a terrorist attack. Friends, the company's management carried out an attack together with the Egyptians," said an Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) bondholder at today's meeting, which discussed the appointment of representatives of the company's three bond series to negotiate a debt settlement.

Ampal, controlled by chairman Yosef Maiman, owns 12.5% of Egyptian natural gas exporter East Mediterranean Gas Company (EMG). EMG's gas deliveries have been repeatedly suspended due to a series of attacks on pipelines in Sinai since February 2011. In mid-December, Ampal announced that it would ask its bondholders for a two-year postponement on the repayment of the bonds' principal.

Ampal relied on dividends from EMG to finance its bond payments, but with gas deliveries suspended indefinitely, it is not known if or when EMG will be able to distribute dividends.

75 bondholders attended the meeting, including both private individuals and financial institutions. Ampal owes the bondholders NIS 870 million. Maiman did not attend, and was represented by his attorneys and Ampal executives, including CFO Irit Iluz. She failed to provide any details about whether Maiman would inject capital into the company as part of a debt settlement. She said, "There will be no haircut, and the debt will be repaid in full. If possible, or if circumstances improve, Ampal will revert to the original debt clearance schedule."

Ampal's share price rose 4.2% today to NIS 1.21, after rising 6.5% on Nasdaq on Friday, giving a market cap of $18 million.

Published by Globes [online], Israel business news - - on January 1, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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