Sinai natural gas terminal in flames.
Sinai natural gas terminal in flames. Photo by AP
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The Red and the Green: Bond yields for three of Israel's tycoons, Millions NIS.
The Red and the Green: Bond yields for three of Israel's tycoons, Millions NIS.

Yossi Maiman did not believe 2011 would end this way. In January, less than half a year ago, he was the tycoon who controls EMG, the East Mediterranean Gas Company - the pipeline that transports gas from Egypt and "supplies" about 20% of Israel's power consumption.

He was the man who owns the biggest and most magnificent yacht in Israel and at least one private airplane, the tycoon who hosts the Independence Day party attended by the top 0.1%.

EMG was then right about to make a public issuance in the U.S. market. This issuance was intended to put tens of millions of dollars in Maiman's pocket and in the coffers of the public company he controls, Ampal-American Israel Corporation, which holds 12.5% of EMG. The first dividend stood at the threshold.

But the Egyptian revolution reshuffled the cards, and, as is now apparent, brought the gas pipeline to the end of its route.

Maiman ended 2011 while he was seeking a debt arrangement - a two-year postponement in repaying bonds totaling NIS 850 million. The press labeled him a "barber," and he was subject to sharp public criticism. As a result, Maiman began to sell his personal assets and even canceled this year's Independence Day party.

In the executive suites of Ampal, which has transferred to Maiman's hands about $200 million in cash over the past decade, they say they are not seeking a haircut, just a two-year postponement.

Perhaps by 2014 a new contract will be signed with Egypt and the investment in EMG will not be totally wiped out, and perhaps the lawsuit, which the controlling owners of EMG filed against the Egyptian government, will bear fruit. Meanwhile, Maiman is only prepared to inject $6 million in the first year to cover Ampal's expenses, saying, "I don't have it."

And what about the bondholders?

For four months they have been threatening to force Ampal into liquidation in an attempt to achieve a better arrangement than the one the company's management is offering. These threats have not yet yielded a significant improvement.

The primary reason is that Ampal is an American company, so the bondholders know that if they seek to liquidate the company, Maiman will drag them into complicated and expensive legal proceedings in the United States.

The bottom line is that a new arrangement will apparently be soon signed that will give Ampal a two-year extension.