Yossi Maiman's Ampal-American Israel Corp. is writing off the entire
value of its 12.5% stake in EMG, the company that sold Egyptian natural
gas to Israel before Cairo scuttled the deal.
The write-off triggered a $284 million operating loss for Ampal in the
first quarter, which included a going-concern warning, the company said
on Tuesday. It did not discuss any turnaround expected from its legal
battle against Egyptian natural gas company EGAS and the Egyptian
Since last year's Egyptian revolution, the pipeline sending gas to
Israel has been attacked repeatedly. Last month, EGAS announced it was
rescinding its contract to supply gas to Israel.
Ampal acquired its stake in EMG from Maiman himself in several stages
for about $300 million based on a market value for the company of $2.2
billion. In recent reports, Ampal valued EMG at $1.5 billion.
Months ago a number of investment managers said EMG was all but
worthless. Last month, after EGAS announced the ending of the gas
contract, institutional investors began to write down their own EMG
stakes to zero.
Ampal owes about NIS 900 million to bondholders and has been trying to
reschedule its obligations to them all year. Its cash on hand, which
stood at $54 million at the beginning of last year, declined by the end
of March 2012 to $46.7 million. In the first quarter, the company had
general and administrative expenses of $11.2 million.
Most of Ampal's revenues come from Gadot Chemical Tankers and Terminals,
but Gadot's first-quarter revenues fell 2.6% from a year earlier to
$131 million. Its chemical business has improved, however, increasing
its gross profit margin to 8.3% from 6.8% a year earlier.
The bottom line for Ampal was a quarterly loss attributable to
shareholders of $215 million, compared with a $17 million profit a year
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