Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL), controlled by chairman Yosef Maiman, yesterday filed for Chapter 11 bankruptcy protection with the US Bankruptcy Court for the Southern District of New York. An injunction imposes an immediate stay of proceeding against the company and its assets, wherever locating, prohibiting its creditors from enforcing any of their rights and bringing any claims against the company or any of its assets.
Ampal's share price fell 78.5% in after-hours trading on Nasdaq yesterday to $0.60, and fell 17.9% in morning trading on the TASE today to NIS 9.10.
Ampal said that its board of directors decided that the bankruptcy filing "is in the best interests of the company's stakeholders and the best and most efficient method for the company to pursue a plan to restructure the Company's Series A, Series B and Series C debentures."
Ampal added that it had been trying to negotiate agreement with its bondholders for eight months, and that it had submitted several proposals, the latest of which was published on July 17 and amended on July 30.
Ampal's holding include a 12.5% stake in Egypt's East Mediterranean Gas Company (EMG), which it acquired from Maiman in a parties at interest deal. EMG's gas deliveries to Israel were frequently disrupted beginning in February 2011, and were halted altogether by the Egyptian government. Ampal and EMG's other shareholders have written off their investment in the company. Ampal also owns Gadot Chemical Terminals & Tankers Ltd. and an ethanol project in Colombia.
In December 2011, Ampal announced that it could not meet its debt payments and opened negotiations on a settlement. The company's shareholders' deficit is NIS 560 million. Since acquiring control of Ampal in 2002, Maiman has received $14.2 million in salary, and his aide and CFO Irit Eluz has received $10.1 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2012
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