Tel Aviv, May 31, 2011 (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 Ampal, as a holder of a 12.5% interest in East Mediterranean Gas S.A.E. ("EMG"), has joined EGI-Fund (08-10) Investors, L.L.C., PTT International Company Limited and other international EMG's shareholders, in taking the formal steps required to initiate an international arbitration process against the Government of Egypt ("GOE") under the U.S.-Egypt bilateral treaty for the protection of investments.
The process was launched when EMG and other international shareholders gave formal notice to the relevant Egyptian ministries demanding consultations with regard to breaches under the Gas Supply and Purchase Agreement (the "Gas Contract") between EMG and the Egyptian General Petroleum Corporation and the Egyptian Natural Gas Holding Company (together the "Seller"), which include the failure to deliver the contractually required amounts of gas to EMG. These violations of the Gas Contract constitute violations of the Treaty between the United States of America and the Arab Republic of Egypt Concerning the Reciprocal Encouragement and Protection of Investments. In the event that the current dispute is not resolved through consultations, EMG's shareholders intend to submit the dispute to the International Centre for the Settlement of Investment Disputes in Washington DC.
As previously announced Ampal has been advised by EMG that the technical repair work to the gas valve station that was damaged by an attack on April 27, 2011 and is owned and operated by the Egyptian government owned gas transport company, has been completed and that the site is technically ready for gas transmission. Furthermore Ampal has been advised by EMG that the implementation of the additional security measures for securing the gas transportation system in the Sinai from further attacks is about to be completed and although EMG did not yet receive an official update on the gas delivery resumption date, it looks forward to a prompt resumption of gas delivery.
Mr. Yosef A. Maiman, Chairman, President and CEO of Ampal, commented: "Ampal, as well as EMG's other international shareholders, are determined to pursue every available avenue to secure the smooth operation of EMG and meeting its contractual obligations to our downstream clients, including by demanding that EMG’s gas supplier performs and honors its obligations under the Gas Contract, as would be expected from a national company seeking to maintain a reputation as a reliable supplier."
Maiman added that "EMG is the only company to increase the price it paid for Egyptian gas in 2009; which is the highest price paid to the Egyptian government by any exporter of Egyptian gas (through pipeline and/or LNG). The price paid by EMG is also higher than the net price paid to the government of Qatar for its gas as well as the net price received by Russia for selling gas to Germany."
"Consequently", Maiman said, "now that the gas pipeline of the GOE is technically ready for gas deliveries and all security measures taken by the GOE are about to be completed, the EMG shareholders shall accept nothing less than adherence to the letter of the GSPA. Failing that, and if gas supply is not restored expeditiously and at the precise contracted quantities, the EMG international shareholders shall resort to any and all legal remedies available to them in any relevant jurisdiction to protect their investment".
Mr. Maiman concluded by saying that "it is important to recall that the international investors have invested a very substantial amount of money in EMG through direct investments and in EMG's shares. Furthermore EMG's various clients with whom EMG has signed contracts have also invested a substantial amount of money in power and industrial plants, all based upon GSPAs with EMG which are backed by a corresponding GSPA between EMG and the Egyptian upstream gas supplier as well as by the MOU between GOE and the Israeli Government. I know that we, in EMG, hope that we do not have to pursue litigation against the GOE which could be in excess of US $8 billion, at the Washington court of arbitration and other international courts in order to protect our rights under the Gas Contract."
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.
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