TEL AVIV, Israel--Ampal-American Israel Corporation announced that on December 31, 2009 it signed an option exercise agreement with Merhav (M.N.F) Ltd. ("Merhav") pursuant to which it has exercised an existing option to convert Ampal's existing $22.249 Million loan ($20 Million plus accrued interest) into a 25% equity interest in a sugarcane ethanol production project in Colombia (the "Project") being developed by Merhav. The purchase of the 25% equity stake and the conversion of the loan is subject to the initial disbursement of a loan from Banco do Brasil, the lender providing project financing to the Project.
�The Project combines the capabilities of Merhav in developing complex international projects and its abilities in Latin America with Ampal's investment strategy. It is also the largest Israeli project in Colombia and is backed by Israel�s leading technology and deep knowledge of irrigation and agriculture�
The Project encompasses approximately 10,000 hectares of land, and includes both agricultural and industrial sectors. All necessary permits, including environmental licenses and free trade zone approval, have been obtained by the Project.
The Project is expected to start commercial production during 2012, and reach its full production capacity of 112 million liters of Ethanol annually in 2014. As a clean energy business, the Project is able to benefit from Colombian environmental legislation that requires 10% Ethanol blending in gasoline distributed in Colombia.
Yosef A. Maiman, Chairman, President and CEO of Ampal stated, "This investment is another step in Ampal's strategy to continue investing in the energy sector, particularly environmentally friendly projects. It joins Ampal's energy related investments which include EMG, a natural gas supplier from Egypt to Israel, and Global Wind Energy, a developer of wind farms outside of Israel.�
�The Project combines the capabilities of Merhav in developing complex international projects and its abilities in Latin America with Ampal's investment strategy. It is also the largest Israeli project in Colombia and is backed by Israel�s leading technology and deep knowledge of irrigation and agriculture," Mr. Maiman concluded.
Yosef A. Maiman, Chairman, President and CEO of Ampal, is the sole owner of Merhav. Merhav is a multinational corporation with interests in a range of sectors, including energy, infrastructure projects, and agriculture. The transaction was approved by a special committee of Ampal's Board of Directors composed of Ampal�s independent directors. Houlihan Lokey Howard & Zukin Financial Advisors, Inc. acted as financial advisors to the special committee.
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