TEL AVIV, Israel, April 29, 2012 (GLOBE NEWSWIRE) -- Ampal-American Israel Corporation (Nasdaq: AMPL), a holding company with experience in acquiring interests in various businesses with emphasis in recent years on energy, chemical and related fields, announced today that Midroog Ltd. (an affiliate of Moody's Investors Service) ("Midroog") has downgraded Ampal's Series A, Series B and Series C debentures' (the "Debentures") ratings by two notches, to C from Caa3. The Debentures are listed and traded on the Tel Aviv Stock Exchange.
Midroog stated that the new rating (as well as the previous rating) reflects Ampal's failure to repay the debt due to the Debenture holders and an increase in the future expected loss to the Debentures holders. Midroog further stated that the downgrade also reflects Ampal's April 22, 2012 announcement of the notice sent to East Mediterranean Gas Company, S.A.E. ("EMG") on April 19, 2012 (the "Notice"), informing EMG of the termination of EMG's Gas Sale and Purchase Agreement with its gas supplier. Midroog stated that the reasons for this termination notice were not mentioned and were not clear. According to Midroog, on April 22, 2012, EMG sent an initial reply letter to its gas supplier claiming that the Notice was unlawful, in bad faith and demanding its revocation. Midroog noted that no gas has been supplied to EMG since March 5, 2012. Midroog added that it has difficulties in evaluating the long term implications of the Notice on Ampal and EMG's operations. Nevertheless, according to Midroog, the Notice increases doubts regarding EMG's ability to continue its operations, and implies a loss rate of 65% or more.
Furthermore, Midroog noted that negotiations between Ampal and the Debenture holders regarding restructuring of Ampal's debt, are continuing.
Finally, Midroog noted that on January 31, 2012, Ampal did not make a principal payment to the Series B debenture holders, which was due on that date, of approximately 115 million New Israeli Shekels ("NIS"), or approximately $30.37 million, and that on March 7, 2012, Ampal did not make an interest payment to the Series C debenture holders, which was due on that date, of approximately NIS6.7 million, or approximately $1.77 million, and added that the interest payment is secured by a deposit held by the trustee.
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.