Ampal seeks bankruptcy protection on Egypt loss

Ampal seeks bankruptcy protection on Egypt loss

JERUSALEM - Agence France-Presse
Energy company Ampal-American Israel Corp has filed for Chapter 11 bankruptcy protection, citing losses caused by a halt in Egyptian gas supplies to Israel, business daily Globes said yesterday.

Ampal, controlled by Israeli businessman Yosef Maiman and which owns 12.5 percent of Israeli-Egyptian consortium East Mediterranean Gas (EMG), filed its application on Aug. 29 with the U.S. Bankruptcy Court for the Southern District of New York, the Israeli newspaper said. In April, Egypt scrapped its gas supply deal with EMG, signed under the rule of ousted President Hosni Mubarak, citing what an official called the consortium’s failure “to respect conditions stipulated in the contract.” The sale of gas to Israel, which signed a 1979 peace treaty with Egypt, has always been controversial in the Arab world’s most populous country. It was the largest trade deal between the two former foes.

The pipeline supplying Israel and Jordan, which crosses the troubled Sinai peninsula, has been hit by bomb attacks 15 times since the uprising which toppled Mubarak in February 2011.

“In December 2011, Ampal announced that it could not meet its debt payments,” Globes said.

Exports to Israel began in the spring of 2008, in accordance with a deal signed three years earlier which came in for heavy criticism from Egypt’s Muslim Brotherhood, which subsequently won elections after the fall of Mubarak.