The case of Yosef Maiman and Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL), which he controls is different from many other tycoons and their troubled companies that sought debt settlements with their bondholders. Ampal's troubles are due to a single extraordinarily large investment in Egypt's East Mediterranean Gas Company (EMG), which supplies natural gas to Israel.
Since February, the gas flow to Israel has been repeatedly interrupted due to attacks on pipelines in Sinai, which occurred before EMG ever distributed a dividend to its shareholders. This fact will make it harder for Ampal to repay its debt to its bondholders in the coming years, which is why it has asked for a two-year postponement on payment of the principal.
The debt settlement could be solved if the bondholders were forced to accept force majeure, or as in the case of other hasty businesses, had Ampal bought the EMG shares from its own controlling shareholder, Yosef Maiman, for $355 million, mostly in cash. The money was paid by Ampal and investment institutions to Maiman's private company, Merhav Group in party at interest deals in 2005-07.
In other words, the NIS 1 billion debt that Ampal cannot pay its bondholders more or less equals the amount that Maiman pocketed from the sale of EMG shares.
Maiman therefore has astonishing audacity to seek a debt settlement for Ampal, before he refunds it hundreds of millions of shekels. True, legally he does not have to do this, as Ampal is a limited company, but in his case, in contrast to the cases of other tycoons, we strongly believe that can do so, and that behind the walls of his luxury house and yacht hides considerable personal wealth.
Published by Globes [online], Israel business news - www.globes-online.com - on December 21, 2011
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