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TEL AVIV, Israel, July 17, 2012 (GLOBE
NEWSWIRE) -- Ampal-American Israel Corporation
(Nasdaq: AMPL), a holding company in the
business of acquiring and managing interests in
various businesses, announced today, following
its previous announcement dated April 4, 2012,
that Ampal has published a new proposed outline
for arrangement (the "Term Sheet") to
be voted on by Ampal's three Debenture
Series' holders in the upcoming days. The
Term Sheet sets out the proposed guiding
principles for a detailed agreement to modify
the terms of all of Ampal's outstanding
Debentures. The Term Sheet reflects the
ongoing negotiations with the committees formed
by the holders of each Debenture Series. If the
Term Sheet is adopted, various court approvals,
registration statements and a detailed
Debenture holders' consent will be
required.
According to the Term Sheet, Ampal will
postpone all of the principal payments due to
all of its Series A, Series B and Series C
Debentures (collectively, the
"Debentures") by two years (the
"Postponement Period"), starting in
December 2011.
The Term Sheet includes various undertakings to
be taken by both Ampal and by its controlling
shareholder group upon final agreement,
including, among others:
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During the Postponement Period, Ampal will
continue to make semi-annual interest
payments due to all of its Debentures, the
first one on the later of October 1, 2012 or
10 working days after the final restructuring
agreement is approved, and the rest once
every six months thereafter. On the date of
the first semi-annual interest payment, Ampal
will pay each Debenture series the entire
interest accumulated up to that date;
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Once the final restructuring agreement is
approved and subject to Ampal's
available cash, Ampal will pay the Debenture
holders a sum of US$5 million on account of
the first principal payment after the
Postponement Period. In any event Ampal will
pay at least $2.5 million not later than
December 31, 2012 and the balance not later
than June 30, 2013. Out of this amount, $1.25
million will be paid to Series B Debenture
holders and the balance will be paid pro rata
between all the Debenture holders;
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For the Postponement Period, all the
Debenture holders will be eligible to receive
additional annual interest at the rate of
1.25% to be paid during the future principal
payments. All of the Debenture holders will
be eligible to receive further additional
annual interest at the rate of 0.75% for the
period after the Postponement Period and
through the maturity of the entire debt due
under the Debentures;
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Ampal will deposit with each Debenture Series
holders' trustee additional cash equal
to the payment of semi-annual interest
payments to the Debenture holders;
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Issuance to the Debenture holders of more
than 23% of Ampal's Class A Stock,
resulting in the Debenture holders holding
23% of Ampal's Class A Stock on a fully
diluted basis after all Class A Stock has
been issued according to the final
restructuring agreement, while Mr. Maiman,
the Chairman, President and CEO of the
Company and a member of Ampal's
controlling shareholder group, will continue
to hold at that time no less than 51% (on a
fully diluted basis) of Ampal's Class A
Stock;
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Ampal will grant the Debenture holders a
single first rank lien, for an unlimited sum,
on Ampal's holdings in a limited
partnership which holds an interest in East
Mediterranean Gas Co. ("EMG"). In
addition, Ampal will undertake that the
remuneration from realization of its holding
in EMG will be distributed prorata between
Ampal and the other limited partners and the
aforesaid limited partnership;
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Ampal's controlling shareholder group
will grant the Debenture holders a single
first rank lien up to a value of US$20
million on 24% of Ampal's controlling
shareholder group's interests in the
Ethanol project in Colombia, held by the
controlling shareholder group (the
"Ethanol Project");
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Ampal will grant the Debenture holders a
single first rank lien, for an unlimited sum,
on Ampal's right to receive payments due
on a loan Ampal provided to a member of the
controlling shareholder group related to the
Ethanol Project including the interest
accrued up to the date of the realization of
such lien, and a similar lien on 25% of the
equity of a company which holds the Ethanol
Project, should Ampal exercise said loan to
equity;
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Ampal will grant the Debenture holders a
single first rank lien, for an unlimited sum,
on Ampal's right to receive payments
resulting from its ongoing arbitrations
against the Government of Egypt related to
its holdings in EMG;
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Ampal will grant the Debenture holders a
single first rank lien, for an unlimited sum,
on Ampal's 37% interest in Bay-Heart
Ltd.;
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Mr. Maiman will grant the Debenture holders a
single first rank lien, for an unlimited sum,
on his 24% interest in Eltek Ltd. (Nasdaq:
ELTK) ("Eltek");
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Ampal will grant the Debenture holders a
single first rank lien on Ampal's
holdings in its fully owned Israeli
subsidiary, Ampal Energy Ltd.Ampal will
request that Israel Discount Bank approve
this lien before approving the final
restructuring agreement. The lien will
include terms and/or a quick resolution
mechanism which would allow for a grace
period before the realization of the lien if
it appears that Ampal is about to complete
its obligations in accordance with the Term
Sheet and it can be assumed that during such
grace period, Ampal would complete its
obligations to the Debenture holders;
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Ampal will be subject to several financial
covenants and enhanced disclosure
undertakings;
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Ampal will not pay dividends or other
payments to its shareholders until 50% of the
outstanding principal payments due to the
Debentures have been repaid to the Debenture
holders;
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During the Postponement Period, Ampal will
not make any out-of-the-ordinary-course-of
business transactions with its controlling
shareholder group, without the prior consent
of the Debenture holders;
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Ampal will not pay Mr. Maiman any salary
during the Postponement Period, and for an
additional period of two years, his cash
salary will be limited to 50% of his current
salary, while the remainder will be paid in
Ampal's Class A Stock;
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The Debenture holders will receive a put
option from a member of Ampal's
controlling shareholder group, exercisable
between March 1, 2013 and September 1, 2013,
on the loan made by Ampal to the controlling
shareholder group with regard to the Ethanol
Project, permitting the Debenture holders to
cause Ampal to call the loan or to sell the
shares Ampal will own in the Ethanol Project
to the controlling shareholder group for
US$22.5 million (plus interest). The payment
of the loan will be made in two installments:
the first 25% of the payment will be made by
July 1, 2013 and the remaining 75% by March
1, 2014. If the option is exercised after
April 1, 2013, the first aforesaid payment
will be made 3 months after the option
exercise. The put option will be cancelled in
the event Ampal sells its holdings in the
Ethanol Project for an amount not less than
$22.5 million (plus interest);
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After the approval of the final agreement,
Mr. Maiman will transfer to Ampal his 24%
holdings in Eltek and he will receive
Ampal's Class A stock with a value of $3
million. Ampal will sell the holdings in
Eltek and if the consideration is less than
$3 million, Mr. Maiman will pay the
difference not later than March 1, 2013. No
later than September 1, 2013, Mr. Maiman will
pay Ampal the difference between the said
amount and $6 million, for which he will
receive additional shares of Ampal's
Class A Stock;
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The controlling shareholder group of Ampal
will not transfer the controlling stake in
Ampal during the Postponement Period and will
waive any rights for a "golden
parachute" in case of change of control
during the Postponement Period and until the
first principal payment is made to all series
of Debentures;
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All of Mr. Maiman's undertakings
detailed above will be mortgaged in favor of
the Debenture holders and will remain valid
in the event of Ampal's insolvency,
receivership, liquidation and stay-off
proceedings;
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The Debenture holders will have the right to
set all of their Ampal debt to immediate
prepayment one year from the finalization and
approval of the restructuring, should Ampal
not meet at least one of the three following
milestones: Gadot's value is higher by
US$20 million than Ampal's secured debt
to Discount Bank; EMG's business has
returned to normal course or EMG provides any
other financial benefits to Ampal; or, a
third party has invested in the Ethanol
Project in an investment reflecting a project
value higher than the project's current
value on Ampal's books (which is
approximately US$90 million for the 100% of
the project);
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The Debenture holders will have the right to
appoint an observer to Ampal's Board of
Directors' meetings. Said observer will
be entitled to authorize Global Wind
Energy's annual budget, to receive
certain information from Ampal regarding its
expenses, etc. He will also be entitled to
receive payments in accordance with the
payments made to the members of the Board,
and will be an additional beneficiary to
Ampal's Directors & Officers insurance
policy;
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During the Postponement Period, Ampal's
general and administrative expenses,
including management fee payments to one of
the members of the controlling group and
payments to Ampal's CFO will be reduced
substantially. Should one of the three
milestones detailed in Section 21 above
occur, a sum of US$250,000 out of the
reduced sum as aforesaid will be paid
to that member and to the CFO;
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Subject to any required approvals, all
payments to Ampal's unsecured financial
debtors will be postponed in the same manner
as the debt to the Debenture holders, which
will be entitled to similar pro rata rights
as provided to the Debenture holders;
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Ampal will not enter to new investments
during the Postponement Period without the
prior consent of the Debenture holders;
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Ampal will have the right to release some of
the liens according to a mechanism to be
agreed upon in the final settlement agreement
and to repay the debt to the Debenture
holders early at the pari value and will be
released at that time from all of its
undertakings;
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Not later than 90 days after the approval of
this Term Sheet, the parties will finalize
the drafting of the detailed restructuring
agreement and will present it for the votes
of the Debenture holders; and
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The detailed restructuring agreement will
include certain exemptions from possible
litigation against Ampal's controlling
shareholders group, its directors and its
officers. Such exemptions are all
subject to Ampal's and Mr. Maiman's
upholding their undertakings and depositing
with the trustees of the Debentures an amount
of $9 million by January 1, 2014 from sources
which do not currently appear in Ampal's
forecasted cash flow, all as will be detailed
in the final restructuring agreement.
Notwithstanding the aforesaid, the exemption
related to the Ethanol Project will be
subject only to the actual payments made by
the member of Ampal's controlling
shareholders group according to Section 17
above.
There is no assurance that Ampal will reach
detailed agreements with the Debenture holders
and obtain all the required consents and
approvals.
The Series A, Series B and Series C Debentures
are listed on the Tel Aviv Stock Exchange. The
Series A, Series B and Series C
Debentures' offerings were made solely to
certain non-U.S. institutional investors in
accordance with Regulation S under the U.S.
Securities Act of 1933, as amended. The
Series A, Series B and Series C Debentures have
not been and will not be registered under the
U.S. securities laws, or any state securities
laws, and may not be offered or sold in the
United States or to United States persons
without registration unless an exemption from
such registration is available. This
notice does not constitute an offer to sell the
Series A, Series B and Series C Debentures nor
is it a solicitation for an offer to purchase
the Series A, Series B and Series C Debentures.
Further, this press release shall not
constitute any offer, solicitation or sale of
any of the Series A, Series B and Series C
Debentures in any jurisdiction in which such
offering sold would be unlawful.
About Ampal:
Ampal 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 that Ampal
can control. For more information about Ampal
please visit our web site at
www.ampal.com.
Safe Harbor Statement
Certain information in this press release
includes forward-looking statements (within the
meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange
Act of 1934) 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 press
release, 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 outcome 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 the 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.
CONTACT: FOR: AMPAL-AMERICAN ISRAEL CORPORATION CONTACT: Irit Eluz CFO - SVP Finance & Treasurer 1 866 447 8636 irit@ampal.com FOR: KM - Investor Relations CONTACT: Roni Gavrielov 011-972-3-516-7620 roni@km-ir.co.il FOR: PM-PR Media consultants CONTACT: Zeev Feiner 011-972-50-790-7890 z@pm-pr.com
Source: Ampal-American Israel Corporation
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AMPAL-AMERICAN ISRAEL CORPORATION 
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