Is Ampal going to bondholders?

Pressure on part of company's institutional investors must have hit home - businessman Yossi Maiman dramatically announces he is surrendering control of Ampal to bondholders

Golan Hazani, Calcalist|Published: 11.13.12 , 08:06

A dramatic upheaval ensued Yossi Maiman's announcement on Sunday that he was surrendering control of Ampal - American Israel Corporation and handing it over to the company's bondholders.

Maiman, who in the past was willing to surrender control of Ampal only on condition that all future claims against him are waived, announced he is now willing to let go of the company with no preconditions.

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Maiman: I won't seek haircut, just deferral

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Owner of Ampal, which is negotiating over debt restructuring, tells Calcalist: 'We could have either made payments in 2012 but opened 2013 with depleted cash and harmed bondholders, or postponed payments by two years while waiting for gas to return'

Meiman: I won't seek haircut, just deferral

This means that the road is clear for the company's bondholders to take Maiman to court for past deals he made in the company, finances that were withdrawn from Ampal's coffers and the loan Maiman gave to a Colombia ethanol project.

Calcalist has learned, however, that Maiman apparently has no intention of repaying the $22 million loan he received from Ampal for the Colombia ethanol project and that the bondholders plan to take to the barricades over issue.

On Sunday Maiman's representative notified the creditors' committee that Maiman was willing to hand over the company. Representative of the creditors' committee, Attorney Ofer Shapira, claims that Maiman's announcement followed a petition made by the creditors' committee to court on Thursday in which they unconditionally demanded Maiman hand over the keys to Ampal to the bondholders.

In the petition, the creditors said that whereas Ampal failed to reach an agreement with its bondholders over the recent years or ever since the company filed for Chapter 11 in the American court at the end of September, the only choice left was handing over control of the company to the creditors.

The petition argued that it was inconceivable that the company would file for bankruptcy protection without submitting a debt restructuring proposal to its creditors.

A source with knowledge of the proceeds said on Sunday that "Maiman was unable to talk the creditors into allowing him to continue running the company. There's nothing left for him to do; the game is over. Once he ceases to providing funds, this is the only step he can take."