Ampal-American Israel Corporation and Other EMG International Owners Launch International Arbitration Process against the Govern
May 31 2011 - 8:15AM
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."
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/KCSA - Investor Relations
CONTACT: Roni Gavrielov
011-972-3-516-7620
roni@km-ir.co.il
Jeff Corbin / Marybeth Csaby
212-896-1214 / 212-896-1236
jcorbin@kcsa.com / mcsaby@kcsa.com
FOR: PM-PR Media consultants
CONTACT: Zeev Feiner
011-972-50-790-7890
z@pm-pr.com
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