Attached files
| file | filename |
|---|---|
| 8-K - 8-K - AMPAL-AMERICAN ISRAEL CORP | zk1211497.htm |
| EX-99.1 - EXHIBIT 99.1 - AMPAL-AMERICAN ISRAEL CORP | exhibit_99-1.htm |
Exhibit 99.2
May 2012
COMPANY
PRESENTATION
PRESENTATION
2
About Ampal:
Ampal-American Israel Corporation (“Ampal” or the “Company”) and its subsidiaries acquire interests primarily in businesses
located in the State of Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a
focus on energy, chemicals and related sectors. Ampal’s goal is to develop or acquire majority interests in businesses that are
profitable and generate significant free cash flow which Ampal can control. For more information about Ampal please visit our web
site at www.ampal.com.
located in the State of Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a
focus on energy, chemicals and related sectors. Ampal’s goal is to develop or acquire majority interests in businesses that are
profitable and generate significant free cash flow which Ampal can control. For more information about Ampal please visit our web
site at www.ampal.com.
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, 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 Securities and Exchange Commission 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.
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, 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 Securities and Exchange Commission 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.
Use of Non-GAAP Financial Measures
Ampal uses certain non-GAAP financial measures in this presentation. Ampal uses non-GAAP financial measures as supplemental
measures of performance and believes these measures provide useful information to investors in evaluating our operations, period
over period. However, non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation
or as a substitute for Ampal’s financial results prepared in accordance with GAAP. In addition, investors should note that any non-
GAAP financial measures Ampal uses may not be the same non-GAAP financial measures, and may not be calculated in the same
manner, as that of other companies. Reconciliations of our non-GAAP financial measures are included in this presentation.
measures of performance and believes these measures provide useful information to investors in evaluating our operations, period
over period. However, non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation
or as a substitute for Ampal’s financial results prepared in accordance with GAAP. In addition, investors should note that any non-
GAAP financial measures Ampal uses may not be the same non-GAAP financial measures, and may not be calculated in the same
manner, as that of other companies. Reconciliations of our non-GAAP financial measures are included in this presentation.
§ Incorporated in New York
§ Invests in companies with a stable cash flow
§ Market Value (Million US$)* 11
3
Company Profile| AMPAL
General Data
Holding Structure
* Based on closing price on NASDAQ on May 10, 2012
• Ampal’s investment focus is principally on companies or ventures where
Ampal can exercise significant influence and use its management experience to
enhance those investments.
Ampal can exercise significant influence and use its management experience to
enhance those investments.
• In making its investment decisions Ampal considers, among other things,
quality of management, potential return on investment, growth potential,
projected cash flow, investment size, financing and all of Ampal’s debts.
quality of management, potential return on investment, growth potential,
projected cash flow, investment size, financing and all of Ampal’s debts.
• Ampal seeks opportunistic situations in a variety of industries, with a focus on
energy, chemicals and related sectors.
energy, chemicals and related sectors.
• Ampal’s goal is to develop or acquire majority interests in businesses that are
profitable and generate significant free cash flow which Ampal can control.
profitable and generate significant free cash flow which Ampal can control.
Strategy
§ On December 19, 2011, Ampal requested that the trustees of its Series A, Series B and
Series C Debentures, which are listed on the Tel Aviv Stock Exchange (the "Debentures"),
convene a meeting of the holders of the Debentures (the “Holders”) to discuss Ampal’s
proposal to postpone the principal payments due on the Debentures for 24 months while
continuing to make the interest payments as scheduled.
Series C Debentures, which are listed on the Tel Aviv Stock Exchange (the "Debentures"),
convene a meeting of the holders of the Debentures (the “Holders”) to discuss Ampal’s
proposal to postpone the principal payments due on the Debentures for 24 months while
continuing to make the interest payments as scheduled.
§ On January 18, 2012, Ampal announced that two separate Holders’ committees had been
formed: one to represent the Series A and Series C Debenture holders and the other to
represent the Series B Debenture holders.
formed: one to represent the Series A and Series C Debenture holders and the other to
represent the Series B Debenture holders.
§ Presently, Ampal does not have sufficient cash and other resources to service its debt and
finance its ongoing operations. This fact raises substantial doubts as to Ampal's ability to
continue as a going concern if Ampal does not reach agreement with the Holders, obtain
additional financing or otherwise raise capital through the sale of assets or otherwise.
finance its ongoing operations. This fact raises substantial doubts as to Ampal's ability to
continue as a going concern if Ampal does not reach agreement with the Holders, obtain
additional financing or otherwise raise capital through the sale of assets or otherwise.
§ Ampal’s management is in the process of negotiations with the Holders’ committees to
restructure the debt to the Holders, but there is no assurance that the negotiations will
succeed.
restructure the debt to the Holders, but there is no assurance that the negotiations will
succeed.
4
Restructuring of Certain Indebtedness
Energy
6
EMG | East Mediterranean Gas - EMG Profile
§ EMG was established and registered in Egypt in 2000 and has constructed an off-shore gas
pipeline from El-Arish (Egypt) to Ashkelon (Israel) as well as on-shore facilities.
pipeline from El-Arish (Egypt) to Ashkelon (Israel) as well as on-shore facilities.
§ Egypt has undertaken to export up to 7 BCM of natural gas annually for 20 years renewable
to Israel through EMG.
to Israel through EMG.
§ EMG’s contracts with Israeli customers for Egyptian natural gas may have terms of up to 20
years, with a total of 140 BCM.
years, with a total of 140 BCM.
§ During 2011 and 2012, several alleged terror attacks on EMG’s gas supplier in Sinai
interrupted EMG’s gas flow.
interrupted EMG’s gas flow.
§ During April 2012, Egyptian General Petroleum Corporation (“EGPC”) and the Egyptian
Natural Gas Holding Company (“EGAS”) notified EMG that they were terminating the Gas
Supply and Purchase Agreement (the “Source GSPA”) between the parties.
Natural Gas Holding Company (“EGAS”) notified EMG that they were terminating the Gas
Supply and Purchase Agreement (the “Source GSPA”) between the parties.
§ EMG considers the termination attempt unlawful and in bad faith, and consequently
demanded its withdrawal. EGPC and EGAS declined to withdraw their termination notice.
EMG informed EGPC and EGAS that their attempt to terminate was wrongful and, both in
isolation and in combination with their other conduct, constituted repudiation of the GSPA,
permitting EMG to exercise its right to terminate the GSPA at common law.
demanded its withdrawal. EGPC and EGAS declined to withdraw their termination notice.
EMG informed EGPC and EGAS that their attempt to terminate was wrongful and, both in
isolation and in combination with their other conduct, constituted repudiation of the GSPA,
permitting EMG to exercise its right to terminate the GSPA at common law.
§ Ampal’s investment in EMG had a carrying amount of $260.4 million as of December 31,
2011. Due to the purported termination of the Source GSPA and the uncertainties in Egypt,
management decided to write-off the entire amount of the investment in EMG. Ampal did
not record future compensation from the arbitrations against Egypt as an asset.
2011. Due to the purported termination of the Source GSPA and the uncertainties in Egypt,
management decided to write-off the entire amount of the investment in EMG. Ampal did
not record future compensation from the arbitrations against Egypt as an asset.
7
EMG | East Mediterranean Gas - BIT Arbitrations
• On May 3, 2012, the Company announced that it had filed a request for arbitration against the Arab
Republic of Egypt, in connection with the Company’s investment in EMG for the breach of the bilateral
investment treaty (“BIT”) between Egypt and the United States. Other EMG investors, including Ampal
affiliates and co-investors in EMG, also requested arbitration under Egypt’s BITs with Poland and Germany.
In the treaty arbitrations, the EMG investors claim that Egypt breached its international obligations under
the applicable investment treaties by failing to provide fair and equitable treatment and full protection
and security to their investments, impairing their investments through unreasonable and discriminatory
measures, failing to observe the Egyptian State’s obligations toward their investments, and expropriating
their investments. Through the arbitrations, the investors seek, among other relief, significant monetary
compensation for damages caused by Egypt’s treaty violations. In accordance with the BIT between Egypt
and the United States, Ampal’s request for arbitration was submitted to the World Bank’s International
Centre for Settlement of Investment Disputes (“ICSID”). Several other US entities and a German citizen
who invested in EMG have also filed requests for arbitration pursuant to the ICSID convention. Mr. Yosef
A. Maiman - a Polish national - and three Ampal-affiliated entities that he controls, submitted a request for
arbitration under Egypt’s BIT with Poland pursuant to the Arbitration Rules of the United Nations
Commission on International Trade Law (“UNCITRAL”).
Republic of Egypt, in connection with the Company’s investment in EMG for the breach of the bilateral
investment treaty (“BIT”) between Egypt and the United States. Other EMG investors, including Ampal
affiliates and co-investors in EMG, also requested arbitration under Egypt’s BITs with Poland and Germany.
In the treaty arbitrations, the EMG investors claim that Egypt breached its international obligations under
the applicable investment treaties by failing to provide fair and equitable treatment and full protection
and security to their investments, impairing their investments through unreasonable and discriminatory
measures, failing to observe the Egyptian State’s obligations toward their investments, and expropriating
their investments. Through the arbitrations, the investors seek, among other relief, significant monetary
compensation for damages caused by Egypt’s treaty violations. In accordance with the BIT between Egypt
and the United States, Ampal’s request for arbitration was submitted to the World Bank’s International
Centre for Settlement of Investment Disputes (“ICSID”). Several other US entities and a German citizen
who invested in EMG have also filed requests for arbitration pursuant to the ICSID convention. Mr. Yosef
A. Maiman - a Polish national - and three Ampal-affiliated entities that he controls, submitted a request for
arbitration under Egypt’s BIT with Poland pursuant to the Arbitration Rules of the United Nations
Commission on International Trade Law (“UNCITRAL”).
• Additionally, Ampal has also been advised by EMG that EMG has initiated arbitration proceedings against
the government-owned Egyptian gas supplier alleging a breach of various provisions of its gas purchase
agreement. EMG seeks, in part, to enforce the undertakings included in the gas purchase agreement.
the government-owned Egyptian gas supplier alleging a breach of various provisions of its gas purchase
agreement. EMG seeks, in part, to enforce the undertakings included in the gas purchase agreement.
• The Company’s management believes, based on advice of its legal counsel, that there is a reasonable
chance of recovering significant monetary compensation for damages through the above described
arbitrations.
chance of recovering significant monetary compensation for damages through the above described
arbitrations.
8
Renewable Energy
§ GWE is owned equally by Clal and Ampal (50%/50%)
§ GWE focuses on the new development and acquisition of controlling interests in renewable
energy, including wind energy projects outside of Israel
energy, including wind energy projects outside of Israel
§ GWE currently has projects in Greece and Poland, which are in varying developmental
stages, with a total capacity of over 250 mega watts (“MW”)
stages, with a total capacity of over 250 mega watts (“MW”)
§ As of March 31, 2012, GWE received a production license for 2 projects for a total capacity
of approximately 60MW wind farms, and a 20MW photovoltaic project, all in Greece
of approximately 60MW wind farms, and a 20MW photovoltaic project, all in Greece
Global Wind Energy (“GWE”)
9
Renewable Energy
§ Production of Bio-Ethanol fuel from sugarcane.
§ The Project includes the development of a 11,000 hectare sugar cane plantation
(Agricultural Project) and the design, construction and operation of an ethanol
production plant (Industrial Project). 10,000 hectares are already available for the
Project, including purchased and leased land.
(Agricultural Project) and the design, construction and operation of an ethanol
production plant (Industrial Project). 10,000 hectares are already available for the
Project, including purchased and leased land.
§ The Colombian government supports the development of the ethanol industry and,
since 2000, has adopted a series of measures to encourage the supply and demand for
ethanol and to create a regulatory framework to set prices, including the adoption of a
series of laws, decrees and resolutions to stimulate carburant alcohol production, sale
and consumption, and including the Colombian Law that stipulates mandatory 10%
blending of ethanol for gasoline use in urban areas.
since 2000, has adopted a series of measures to encourage the supply and demand for
ethanol and to create a regulatory framework to set prices, including the adoption of a
series of laws, decrees and resolutions to stimulate carburant alcohol production, sale
and consumption, and including the Colombian Law that stipulates mandatory 10%
blending of ethanol for gasoline use in urban areas.
§ Ampal holds a loan of approximately US$22 million convertible to 25% of the Project, to
be converted upon the first withdrawal from the financing bank.
be converted upon the first withdrawal from the financing bank.
Ethanol Project in Colombia
Chemicals
11
Gadot Chemicals Tankers & Terminals | Gadot
§ The leading Israeli company for chemical
supply and services to customers
throughout the supply chain of chemicals
from producer to end-user (mainly liquid
chemicals).
supply and services to customers
throughout the supply chain of chemicals
from producer to end-user (mainly liquid
chemicals).
Gadot Profile
12
Gadot Chemicals Tankers & Terminals | Gadot
§ Years of experience in storage, handling, packaging, transporting and
shipping hazardous materials.
shipping hazardous materials.
§ Provides services to the entire chemicals supply chain in Israel.
§ Geographic Areas of Activity: Israel, Western Europe, South and
Central America, USA.
Central America, USA.
§ Clients, including major Israeli companies:
Teva, Makhteshim, ICL, Palsan, HP and others.
Chemicals Field
13
Gadot Chemicals Tankers & Terminals | Gadot
Financial Highlights
|
US$ in Millions
|
Q1 - 2012
|
Q1 - 2011
|
2011
|
|
Revenues
|
131
|
135
|
540
|
|
Adjusted
EBITDA* |
6
|
5
|
30
|
*See EBITDA break-down on Appendix A
Financials
15
Condensed Solo* (unconsolidated) Balance Sheet (Pro-Forma) - March 31, 2012
* Including Gadot, Merhav Ampal Energy Holdings, LP and Country Club Kfar Saba on equity basis and not consolidated.
** Including a convertible loan of approximately US$22M to the project in Colombia.
|
Assets
|
|
Liabilities and
Shareholders’
Equity
|
||||
|
|
|
US$
(in Millions)
|
|
|
|
US$
(in Millions)
|
|
Cash, deposits and other
financial items**
|
|
79.0
|
|
Banks and Debentures
|
|
327.8
|
|
Investments (mainly Gadot)
|
|
110.9
|
|
Accounts Payable and
Others
|
|
|
|
Fixed Assets
|
|
2.1
|
|
|
14.3
|
|
|
Other
|
|
18.0
|
|
Equity
|
|
(132.1)
|
|
|
|
|
|
|
|
|
|
Total
|
|
210.0
|
|
Total
|
|
210.0
|
Current Liabilities (excluding banks and
debentures)
debentures)
Current Assets (excluding cash, deposits
and other financial items)
and other financial items)
16
Condensed Consolidated Balance Sheet - March 31, 2012
Cash, deposits and other financial items*
Fixed Assets
Investments:
Other Investments
177.1
89.6
572.9
192.6
10.3
US$ (in
Millions)
Millions)
Gadot - Construction of Vessels
Other Liabilities
Capital Note - Institutional Investors in EMG
89.3
572.9
47.5
29.1
98.7
US$ (in
Millions)
Millions)
Banks - Ampal
243.8
86.6
208.0
Debentures
Loans:
Equity
(132.1)
*Including a convertible loan of approximately US$22M to the project in Colombia
Other Non-Current Assets
24.5
Goodwill and Intangible Assets
78.8
Minority rights
(98.0)
Thank you!
18
Appendix A - EBITDA Break-Down for Gadot
131
(120)
11
(10)
4
5
1
6
Three Months Ended
March 31, 2012
March 31, 2012
135
(126)
9
(10)
6
5
-
5
Three Months Ended
March 31, 2011
March 31, 2011
Revenues
Expenses
Profit
Marketing, sales, general,
administrative and other expenses
administrative and other expenses
Depreciation and amortization
EBITDA
Non-recurring and stock
compensation expenses
compensation expenses
Adjusted EBITDA
540
(494)
46
(44)
25
27
3
30
Twelve Months Ended
December 31, 2011
December 31, 2011
19
Adjusted EBITDA is defined as earnings before interest, income tax provision,
depreciation and amortization, adjusted for non recurring expenses. Management
believes adjusted EBITDA for Gadot to be a meaningful indicator of its
performance that provides useful information to investors regarding its financial
condition and results of operations. Presentation of adjusted EBITDA is a non-
GAAP financial measure commonly used by management to measure operating
performance. While management considers adjusted EBITDA to be an important
measure of comparative operating performance, it should be considered in
addition to, but not as a substitute for, net income and other measures of financial
performance reported in accordance with Generally Accepted Accounting
Principles. Adjusted EBITDA does not reflect cash available to fund cash
requirements. Not all companies calculate adjusted EBITDA in the same manner,
and the measure as presented may not be comparable to similarly-titled measures
presented by other companies.
depreciation and amortization, adjusted for non recurring expenses. Management
believes adjusted EBITDA for Gadot to be a meaningful indicator of its
performance that provides useful information to investors regarding its financial
condition and results of operations. Presentation of adjusted EBITDA is a non-
GAAP financial measure commonly used by management to measure operating
performance. While management considers adjusted EBITDA to be an important
measure of comparative operating performance, it should be considered in
addition to, but not as a substitute for, net income and other measures of financial
performance reported in accordance with Generally Accepted Accounting
Principles. Adjusted EBITDA does not reflect cash available to fund cash
requirements. Not all companies calculate adjusted EBITDA in the same manner,
and the measure as presented may not be comparable to similarly-titled measures
presented by other companies.