Merhav documents: Meiman has $30M left
Businessman's gas enterprise may be winded but his private bank account appears to be inflated – dozens of millions of dollars remaining from sale of his stake in Egyptian EMG gas company to publicly traded Ampal which is under his control
EMG was a joint Israeli-Egyptian venture established to supply gas to Israel. In 2005, under a diplomatic agreement between the two countries, the company undertook to supply Israel with 7 billion BCM of natural gas annually for a 20-year period.
That same year, EMG signed a 15-year gas supply agreement with the Israel Electric Corporation.
In a deal with the company's parties at interest in 2006, Merhav sold half of Meiman's holdings (12.5%) in the consortium to Ampal for $258.3 million, $150 million of which was paid in cash.
Last summer, Meiman diluted his holdings in EMG by selling 4.4% of his holdings in the company through Merhav to institutional investors headed by the Israel Infrastructure Fund for some $100 million.
At the same time, Meiman transferred 4.4% of his EMG stake in Ampal to form a consortium with institutional investors – Merhav-Ampal Energy Holdings.
In October 2007, Meiman sold another 4.3% stake of EMG to institutional investors for $95 million in cash and at the same time also sold 12.5% of his EMG shares to Ampal for which he received $148 million in cash and another $111 million in Ampal stock at a $4.75 value per share.
The document obtained by Calcalist reveals that the investment in the Egyptian gas line amounted to $550 million, 25% of which was funded by Meiman – some $137 million, from which $35 million came from his own pocket. Meiman had previously invested some $45 million in the preliminary stages of the pipeline project in addition to $90 million in state taxes following the sale of the shares, the document specifies.
The current value of Meiman's Ampal stock is a mere $9 million after it plummeted to 36 cents a share. Meiman held on to the shares and Ampal did not distribute dividends. Furthermore, Meiman used $200 million to repay a loan to Bank Leumi.
The loss on the Ampal stock, even if only on paper, cost Meiman $100 million which is compounded by other costs. From the original $353 million for the shares, he now only has even less than $30 million, if the initial investment in the project is considered.
Legal dispute
Meiman is presently entangled in a legal dispute with former Merhav VP Nimrod Novik, who claims Meiman broke his personal promise to compensate Novik for his efforts and performance which made the company more than $350 million in the EMG project alone.
He also argues that he was the "project's initiator and architect and responsible for the project for over 12 years."
According to the statement of claim, Meiman did not bother to respond to the allegations brought against him and has yet to respond to Novik's statement of claim and is expected to do so soon.
Furthermore, Meiman's investment in Channel 10 is in deep water. He invested some NIS 800 million (about $214 million) in the channel in the past decade.
Shareholders refuse to transfer funds to bail out the floundering channel and recently a merger between the channel and Channel 2 concessioner, Reshet, is being discussed.
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