Attached files
| file | filename |
|---|---|
| 8-K - 8-K - AMPAL-AMERICAN ISRAEL CORP | zk1210844.htm |
Debentures’ Holders Meeting
January 2012
Ampal-American Israel Corporation
Translation from Hebrew
Exhibit 99.1
Current Status - Major issues
* Conversion of a loan which is subject to several Condition Precedents
Business Developments - 2011
• On January 2011 the sale of 012 Smile to Partner was completed
for a consideration of approximately NIS 1.5 billion.
for a consideration of approximately NIS 1.5 billion.
• After an internal re-organization and the completion of
purchases of synergetic business into Gadot, Gadot has
prepared for an IPO in Europe.
purchases of synergetic business into Gadot, Gadot has
prepared for an IPO in Europe.
• EMG received an indicative international rating from S&P, for
the international securitization of EMG, at a sum of
approximately US$1billion, with the assistance of Goldman
Sachs.
the international securitization of EMG, at a sum of
approximately US$1billion, with the assistance of Goldman
Sachs.
Business Developments - 2011 - EMG
• At the end of January 2011 The “Arab Spring” has began in the area,
and the revolution in Egypt began.
and the revolution in Egypt began.
• In February the first terror attack on the Egyptian gas pipeline
occurred, and gas supply to EMG was interrupted for the first time.
occurred, and gas supply to EMG was interrupted for the first time.
• Since February 2011 there have been 11 terror attacks on the Egyptian
gas pipeline in the Sinai. In most cases, the interruption included gas
supplied to Jordan, Syria and industrial Gas consumers in the Sinai.
gas pipeline in the Sinai. In most cases, the interruption included gas
supplied to Jordan, Syria and industrial Gas consumers in the Sinai.
• Ampal is working intensively in the international arena for the return
of regular gas supply and for the securing of the Sinai gas transport
system. Indeed, gas supply has resumed after the terror attacks and
the Egyptian government has substantially reinforced the security of
the system.
of regular gas supply and for the securing of the Sinai gas transport
system. Indeed, gas supply has resumed after the terror attacks and
the Egyptian government has substantially reinforced the security of
the system.
Business Developments - 2011 - EMG
• Ampal continues to estimate, even in light of the Egyptian revolution, that gas
supply to Israel is a strategic and economic asset valuable to Egypt and that
therefore it is expected to continue after the regime replacement.
supply to Israel is a strategic and economic asset valuable to Egypt and that
therefore it is expected to continue after the regime replacement.
• Nonetheless, Ampal began, immediately after the first terror attack, to act,
together with EMG’s international shareholders (the Thai energy corporation
- PTT and the American businessman Mr. Sam Zell), in two parallel levels -
political-commercial and legal.
together with EMG’s international shareholders (the Thai energy corporation
- PTT and the American businessman Mr. Sam Zell), in two parallel levels -
political-commercial and legal.
• Status as of November 2011:
– Gas was supplied in considerable quantities;
– The terror group which was allegedly responsible for the terror attacks was captured in
the Sinai;
the Sinai;
– Gilad Shalit was released from captivity with the intervention of the Egyptian
government;
government;
– Relative peace in the Egyptian streets.
Business Developments - 2011 - EMG
• In light of the above, until said date Ampal’s management
believed that EMG’s business is relatively stable.
believed that EMG’s business is relatively stable.
• At the end of November 2011, two consecutive terror attacks
occurred in the Egyptian pipeline (although the terror group
allegedly responsible have already been captured).
occurred in the Egyptian pipeline (although the terror group
allegedly responsible have already been captured).
• At the beginning of December 2011 preliminary results of the
Egyptian parliament elections have been published, according to
which, Islamic groups have received higher percentages of the
votes than expected. This trend continued in the results of the
second round of elections.
Egyptian parliament elections have been published, according to
which, Islamic groups have received higher percentages of the
votes than expected. This trend continued in the results of the
second round of elections.
Business Developments - 2011 - EMG
• Until said date Ampal assessed that it would not receive dividends
from EMG during 2011 and 2012, and estimated that it will not have
cash flow problems due to that fact, but in light of the above
developments, Ampal changed its assessment and it seems that
dividends from EMG during 2013 are highly doubtful and Ampal’s
ability to refinance its debt has decreased, in light of the current
uncertainties.
from EMG during 2011 and 2012, and estimated that it will not have
cash flow problems due to that fact, but in light of the above
developments, Ampal changed its assessment and it seems that
dividends from EMG during 2013 are highly doubtful and Ampal’s
ability to refinance its debt has decreased, in light of the current
uncertainties.
• In addition to the efforts made to return EMG to its normal course of
business, there are ongoing legal proceedings between EMG and its
gas supplier, and also between EMG’s shareholders and the Egyptian
government (claims under Bilateral Investment Treaties - BIT). The
Bilateral claims are expected to take two years and require
considerable financial and managerial resources.
business, there are ongoing legal proceedings between EMG and its
gas supplier, and also between EMG’s shareholders and the Egyptian
government (claims under Bilateral Investment Treaties - BIT). The
Bilateral claims are expected to take two years and require
considerable financial and managerial resources.
Claim Vs. Egypt - BIT
• A Bilateral Investment Treaty is a treaty between two countries which
gives foreign investors from one country diverse protections of their
investments in the other country.
gives foreign investors from one country diverse protections of their
investments in the other country.
• A BIT claim is submitted to international arbitration and its judgment
can be effectively enforced against the country’s assets in many
countries worldwide.
can be effectively enforced against the country’s assets in many
countries worldwide.
• Ampal acts in order to submit BIT claims in accordance with the US-
Egypt BIT and the Poland-Egypt BIT, through Freshfields Law Firm
which is a leading international law firm in the field of international
arbitrations in general, and in BIT claims in particular.
Egypt BIT and the Poland-Egypt BIT, through Freshfields Law Firm
which is a leading international law firm in the field of international
arbitrations in general, and in BIT claims in particular.
Claim Vs. Egypt - BIT
• The arbitration judgment gives the claimant full restitution for
economic loss due to the breach of the BIT, and its target is to give
monetary compensation which will bring the claimant to its economic
status prior to the breach.
economic loss due to the breach of the BIT, and its target is to give
monetary compensation which will bring the claimant to its economic
status prior to the breach.
• In light of Freshfields’ long experience, in the arbitration process, a
judgment should not take more than two years.
judgment should not take more than two years.
• It should be noted that Egypt in past cases, has paid its judgments,
with no need for an enforcement procedures.
with no need for an enforcement procedures.
• Freshfields estimates that Ampal’s chances of success in the BIT claim
for compensation of its damages are reasonable.
for compensation of its damages are reasonable.
Business Developments - 2011 - Gadot
• During the last year Ampal has taken measures for the partial
realization of its holdings of Gadot, and Gadot has taken
measures for obtaining a new investor and for its IPO.
realization of its holdings of Gadot, and Gadot has taken
measures for obtaining a new investor and for its IPO.
• It should be noted that Gadot’s business development and part
of its financial management is handled and backed up by
Ampal’s officers.
of its financial management is handled and backed up by
Ampal’s officers.
• In the current market situation, both Gadot’s operational market
(mainly Europe) and the financial markets, it is not profitable
and not likely to complete such moves at this time.
(mainly Europe) and the financial markets, it is not profitable
and not likely to complete such moves at this time.
Business Developments - 2011 - Gadot
• We believe that the right time to introduce an investor to Gadot
will be when the situation in Europe stabilizes, which will
provide Ampal with substantial cash flow.
will be when the situation in Europe stabilizes, which will
provide Ampal with substantial cash flow.
• When the financial market will stabilize, we will be able to
renew the procedures for Gadot’s IPO.
renew the procedures for Gadot’s IPO.
Conclusions
• In light of the developments described above, Ampal should get
ready for a period of at least two years in which Ampal’s main
use of its cash will be designated for the strengthening and
securing its current assets.
ready for a period of at least two years in which Ampal’s main
use of its cash will be designated for the strengthening and
securing its current assets.
• During the next two years there will be a need for a special
managerial effort of Ampal’s management, and an allocation of
financial resources for handling EMG’s situation at two levels:
Political-Commercial and Legal, and for the strengthening of
Gadot.
managerial effort of Ampal’s management, and an allocation of
financial resources for handling EMG’s situation at two levels:
Political-Commercial and Legal, and for the strengthening of
Gadot.
2014 - EMG Outlook
• Our estimate is that, after partial operations of EMG in the upcoming
months, EMG will return to its normal course of business, and that as
a result, during 2014 at the latest, Ampal should receive dividends of
over US$20 million per year.
months, EMG will return to its normal course of business, and that as
a result, during 2014 at the latest, Ampal should receive dividends of
over US$20 million per year.
• EMG’s return to its normal course of business will allow Ampal and
EMG to perform financial activities which will result in an increase of
Ampal’s cash.
EMG to perform financial activities which will result in an increase of
Ampal’s cash.
• Even if contrary to Ampal’s estimates, EMG does not return to its
normal course of business, Ampal believes that the BIT claims and
EMG’s claim will reach their successful conclusions by 2014 which will
result in an increase of Ampal’s cash with substantial monetary
compensation due to the loss of its investment in EMG.
normal course of business, Ampal believes that the BIT claims and
EMG’s claim will reach their successful conclusions by 2014 which will
result in an increase of Ampal’s cash with substantial monetary
compensation due to the loss of its investment in EMG.
2014 - Gadot Outlook
• It is estimated that during 2013 the financial situation in Europe will
stabilize, and the uncertainties will decrease.
stabilize, and the uncertainties will decrease.
• The mergers and acquisitions which took place during 2010-2011 will
mature, bring economic value and will substantially improve Gadot’s
business and financial results.
mature, bring economic value and will substantially improve Gadot’s
business and financial results.
• Ampal’s management estimates that in 2013 Gadot will undertake an
IPO after a preliminary stage of introducing an investor.
IPO after a preliminary stage of introducing an investor.
• These actions should permit Ampal’s cash to increase from a
combined realization of approximately 20%-25% of Gadot’s shares.
combined realization of approximately 20%-25% of Gadot’s shares.
Ampal’s Request of the Debentures’
Holders
Holders
• Appointment of one delegation for all of the Debentures Series which
will discuss the need for a two-year postponement of principal
payments to all of the Debentures Series (after which the payment
schedule will return to its original terms).
will discuss the need for a two-year postponement of principal
payments to all of the Debentures Series (after which the payment
schedule will return to its original terms).
• The postponement will not include a “trimming” (reduction) of the
debt owed.
debt owed.
• Interest payments will be made on time.
• If the circumstances will improve and allow it, Ampal will return to the
original payment schedule.
original payment schedule.
Debentures
Financial Debt Payments During 2012-2013,
assuming two-year postponement of Principal
Payments
assuming two-year postponement of Principal
Payments
• Estimated cash balance at January 1st, 2012 - approximately
US$60 million.
US$60 million.
• Expected interest payments for debentures’ holders during 2012
-2013 - approximately US$32 million.
-2013 - approximately US$32 million.
• Expected payments for banks during 2012-2013 - approximately
US$20 million.
US$20 million.
Safe Harbor Statement on Forward-Looking Statements
Certain information in this presentation includes forward-looking statements (within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934 , as amended) and information relating to Ampal that are based on the beliefs of management
of Ampal as well as assumptions made by and information currently available to the management of
Ampal. When used in this presentation, the words "anticipate," "believe," "estimate," "expect,"
"intend," "plan," and similar expressions as they relate to Ampal or Ampal's management, identify
forward-looking statements. Such statements reflect the current views of Ampal with respect to future
events or future financial performance of Ampal, the outcome of which is subject to certain risks and
other factors which could cause actual results to differ materially from those anticipated by the forward
-looking statements, including among others, the economic and political conditions in Israel, the Middle
East, including the situation in Iraq and Egypt, Europe and the global business and economic conditions
in the different sectors and markets where Ampal's portfolio companies operate. Should any of these
risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or
outcomes may vary from those described herein as anticipated, believed, estimated, expected,
intended or planned. Subsequent written and oral forward-looking statements attributable to Ampal or
persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this
paragraph. Please refer to Ampal's annual, quarterly and periodic reports on file with the SEC for a more
detailed discussion of these and other risks that could cause results to differ materially. Ampal assumes
no obligation to update or revise any forward-looking statements.
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934 , as amended) and information relating to Ampal that are based on the beliefs of management
of Ampal as well as assumptions made by and information currently available to the management of
Ampal. When used in this presentation, the words "anticipate," "believe," "estimate," "expect,"
"intend," "plan," and similar expressions as they relate to Ampal or Ampal's management, identify
forward-looking statements. Such statements reflect the current views of Ampal with respect to future
events or future financial performance of Ampal, the outcome of which is subject to certain risks and
other factors which could cause actual results to differ materially from those anticipated by the forward
-looking statements, including among others, the economic and political conditions in Israel, the Middle
East, including the situation in Iraq and Egypt, Europe and the global business and economic conditions
in the different sectors and markets where Ampal's portfolio companies operate. Should any of these
risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or
outcomes may vary from those described herein as anticipated, believed, estimated, expected,
intended or planned. Subsequent written and oral forward-looking statements attributable to Ampal or
persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this
paragraph. Please refer to Ampal's annual, quarterly and periodic reports on file with the SEC for a more
detailed discussion of these and other risks that could cause results to differ materially. Ampal assumes
no obligation to update or revise any forward-looking statements.