"I worked hard for eight months to apply overt and covert political efforts on several governments, as well as legal action, despite unnecessary difficulties caused by an irresponsible minority in the capital market to adversely affect these efforts," said Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) chairman Yosef Maiman today, in the wake of the company's filing for Chapter 11 bankruptcy protection with the US Bankruptcy Court for the Southern District of New York yesterday.
"The Egyptian project was an international strategic project with the support of the Israeli and foreign governments, as well as foreign investors. Regrettably, due to unexpected circumstances in Egypt, the company has fallen into its current state. The entire Israeli economy invested billions on the basis of Egyptian gas, and the risk was known to everyone who invested in Ampal bonds. They also knew that East Mediterranean Gas (EMG) was Ampal's main asset for repaying this debt," said Maiman.
According to Maiman, "An absurdity resulted, in which I did everything for eight months to reach a fair settlement that would serve the bondholders and signed agreements with two representatives, but an irresponsible minority among the investment institutions, who were supposed to represent the bondholders, forgot this, and spent their time writing newspaper articles on one hand, or how this would affect their standing among the competition on the other, even at the cost of destroying value for the bondholders. At the same time, this minority of so-called bondholder representatives knew perfectly well that every calculation showed the proposed settlement which was signed by the representatives that they appointed was the best alternative for the bondholders, and that every other alternative would destroy value for the bondholders."
Maiman concluded, "Under the court's protection, we will continue to do everything to reach a fair settlement with the bondholders. I hope that everyone will act out of the interest to protect Ampal's bondholders, and put aside all their other interests."
In a statement, the two institutions in question, Meitav Investment House Ltd. and Psagot Investment House Ltd., said in response, "This is an act that verges on extreme bad faith, or worse. For days, the investment institutions negotiated with Ampal's representatives, especially Yosef Maiman, the company's controlling shareholder, and Irit Eluz, its CFO, to reach understandings on a debt settlement for the company. Furthermore, a week ago, Ampal asked Meitav and Psagot to join the representatives, ostensibly to reach an agreed upon structure. But it is now clear that, paralleling the negotiations with the institutions, the company was already preparing a unilateral petition for bankruptcy protection to the US courts.
"Lately, Ampal made various proposals for a settlement and then withdrew them. It is now clear that Ampal's objective was tactical, to gain time, and that it had no real wish for a genuine agreement. It also now clear that the petition to the US courts is a continuation of Ampal's tactic to buy time, especially since these procedures in the US can last for months and greatly reduce the company's emptying cash reserves. While the company was misleading the institutions and investors, Ampal's executives continued to draw huge salaries of millions of shekels a year, even as its debt to saves and the State of Israel amounts to NIS 1 billion."
Meitav and Psagot concluded, "We regret that people like Yosef Maiman and Irit Eluz prefer topping their private bank accounts at the expense of the pensions of hundreds of thousands of policyholders in Israel. We regret that these are the values and rules of corporate governance that they choose to represent. Meitav and Psagot wish to emphasize that such conduct is inappropriate and cannot be part of the Israeli capital market. We believe that the Israeli capital market will uproot such unacceptable conduct and will not permit its continued existence."
Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012