The bondholders of Ampal-American Israel Corporation have had enough: they want the company liquidated after negotiations over a debt settlement broke down last week.
Ampal owes NIS 900 million to the bondholders and $20 million to Israel Discount Bank. The company had issued the bonds in 2008 to buy a 12.5% stake in Eastern Mediterranean Gas Company from Ampal's own controlling shareholder, Yossi Maiman.
Representatives of B2 series bondholders want to convoke an Ampal assembly to vote on the company's liquidation. Yesterday the bondholders' representatives complained to the Israel Securities Authority that the company has been balking at publishing a summons to an assembly.
To send Ampal to the butcher's block, 75% of unaffiliated bondholders would have to vote in favor of the proposal.
Ampal's main asset is that 12.5% interest in EMG, which brokers the sale of Egyptian gas to Israel. Ampal's main problem - which has forced it to seek a debt arrangement - is that the gas supply from Egypt to Israel has all but broken down. The pipeline (which passes through the Sinai desert ) has been blown up 12 times in as many months, following the ouster of Hosni Mubarak's regime last February.
As its fortunes wilted, Ampal forwent paying dividends to investors last year. EMG had planned to float stock in the U.S. during 2011: that, naturally, did not happen, either.
The question is whether EMG and its pipeline have any future at all. Other investors in EMG, who had bought shares in the firm at a company valuation of $2.2 billion, have written off 80% to 90% of the company's value in their books.
Ampal ended 2011 with $60 million cash and debt of $300 million. While it also has holdings in Gadot Chemical Tankers, which does provide it with some cash flow, that's not enough to service its bond debt. Two weeks ago Ampal missed a $30 million payment to bondholders: the next one is due in half a year.
