Ampal shares hit 6-year low after termination of Egypt-Israel gas deal
Bassem Abo Alabass, Monday 23 Apr 2012
Tel Aviv-listed company sees its shares plunge 21 per cent following Sunday night's announcement that Egypt terminates gas sales to the self-proclaimed Jewish state

Shares in a company involved in importing gas from Egypt to Israel plunged 21 per cent in Monday trade, blasted by the news that Egypt has unilaterally terminated the export contract between the two countries.

Ampal-American Israel Corporation stock lost a fifth of its value to reach 0.75 shekels each, pulling the Tel Aviv stock exchange's main index -- the TA-25 -- down 1.4 per cent, its sharpest fall in a week.

On Sunday evening, reports emerged that Egypt is unilaterally terminating its 2005 natural gas export contract with Israel -- a Mubarak-era deal which sold Egyptian resources to the self-proclaimed Jewish state at vastly-discounted rates.

Ampal, which is controlled by Chairman Yosef Maiman, owns a 12.5 per cent stake in the East Mediterranean Gas Company (EMG).

Ampal's shares are at their lowest since August 2006, according to figures quoted by Bloomberg.

"The situation was bad before, and it’s bad now," the Israeli financial newspaper Globes quoted Ampal’s CFO Irit Eluz as saying.

The Egyptian decision to cancel exports, was prompted more by business than political reasons, Eluz suggested.

"We believe that this is a tactical measure in response to the legal proceedings we initiated," he added.

The 20-year natural gas deal signed between Israel and Egypt in 2005 has been a pillar of Egyptian-Israeli economic cooperation. It followed the historic 1979 peace treaty between the two countries.