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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 23, 1996
AMPAL-AMERICAN ISRAEL CORPORATION
(Exact name of Registrant as specified in its charter)
NEW YORK 0-538 13-0435685
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation
1177 AVENUE OF THE AMERICAS, NEW YORK NEW YORK 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
INCLUDING AREA CODE: (212) 782-2100
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(Former Name or Former Address, if Changed Since Last Report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 23, 1996, Ampal Industries, Inc. ("Ampal Industries"), a
wholly-owned subsidiary of Registrant, and Ampal Industries (Israel) Ltd.
("Ampal Industries (Israel)") a wholly-owned subsidiary of Ampal Industries
(collectively, the "Ampal Group"), transferred their 58.5% equity interest in
Pri Ha'emek (Canned and Frozen Food) 88 Ltd. ("Pri Ha'emek"), a food processing
company, to Agrifarm International Limited ("Agrifarm"), a British company. The
sale was made pursuant to an agreement entered into between Ampal Industries and
Agrifarm on October 11, 1996.
As part of the same transaction, the following were effected:
1. The Ampal Group waived its rights to receive the outstanding balance
of loans made by it to Pri Ha'emek in the amount of NIS 7,897,796
(equal to $2,415,967)*.
2. The Ampal Group assigned to Agrifarm loans in the amount of NIS
3,033,720 (equal to $928,027)*, due from Pri Ha'emek.
3. The Ampal Group transferred to Agrifarm $1,500,000, which amount
Agrifarm transferred to Pri Ha'emek in exchange for which Bank
Hapoalim B.M. released the Ampal Group from guarantees of debts of Pri
Ha'emek totaling $1,500,000.
4. The Ampal Group transferred NIS 2,045,812 (equal to $625,822)* to Pri
Ha'emek.
5. Agrifarm granted to the Ampal Group an option to repurchase between
5.8% and 8.3% of Pri Ha'emek's shares from Agrifarm for one and
one-half years at a price of NIS 0.50 per share. The number of shares
covered by this option is dependent upon the number of shares of Pri
Ha'emek which may be purchased by Agrifarm from another shareholder of
Pri Ha'emek. Pri Ha'emek had approximately 14 million shares
outstanding on September 30, 1996.
* As at December 23, 1996, the rate of exchange between the New Israel Shekel
and the U.S. Dollar was NIS 3.269 to $1.00.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(B) PRO FORMA FINANCIAL INFORMATION Page
Pro Forma Consolidated Statement of Income for
the Year Ended December 31, 1995 (Unaudited) 4
Notes and Management's Assumptions to Pro
Forma Consolidated Statement of Income for
the Year Ended December 31, 1995 (Unaudited) 5
(C) EXHIBITS
Exhibit 2 -- English translation of a Share Purchase Contract dated October
11, 1996, between Ampal Industries, Inc. and Agrifarm
International Ltd. (Incorporated by reference to Exhibit 10 to
Form 10-Q for the quarterly period ended September 30, 1996.)
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Item 7(b) PRO FORMA FINANCIAL INFORMATION
The following Pro Forma Consolidated Statement of Income for the year ended
December 31, 1995 has been prepared to reflect the disposition transaction and
the adjustments described in the accompanying notes. The pro forma financial
information is based on the historical consolidated financial statements of
Ampal-American Israel Corporation (the "Registrant") and its subsidiaries (the
"Company") and should be read in conjunction with the notes and management's
assumptions thereto. The Pro Forma Consolidated Statement of Income for the
year ended December 31, 1995 was prepared assuming the transaction occurred on
the first day of the period presented and excludes results of operations of Pri
Ha'emek (Canned and Frozen Food) 88 Ltd. ("Pri Ha'emek") for the year ended
December 31, 1995. The pro forma financial information is unaudited and not
necessarily indicative of the consolidated results which actually would have
occurred if the disposition transaction had been consummated at the beginning of
the period presented, nor does it purport to represent the results of operations
for future periods.
The Company recorded the disposition transaction in its September 30, 1996
consolidated financial statements presented in Form 10-Q, and the effect of this
transaction was reflected in those consolidated financial statements as
discontinued operations. The December 31, 1995 Consolidated Balance Sheet was
restated to give effect to the disposition.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in thousands, except per share data)
YEAR ENDED DECEMBER 31, 1995
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Pro Forma
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
REVENUES:
Equity in earnings of affiliates...... $ 7,424 $ 7,424
Food processing and manufacturing..... 41,601 (31,442)2(a) 10,159
Interest:
Related parties...................... 10,515 296 2(a) 10,811
Others............................... 3,781 (152)2(a) 3,629
Rental income......................... 8,450 (657)2(b) 7,793
Realized and unrealized gains
on investments...................... 2,193 2,193
Gains on sale of real estate
rental property..................... 2,009 (1,483)2(c) 526
Other................................. 2,178 2,178
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Total revenues................... 78,151 44,713
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EXPENSES:
Food processing and manufacturing..... 46,767 (37,331)2(a) 9,436
Interest:
Related parties...................... 4,392 (1,284)2(a) 3,108
Others............................... 11,898 (2,085)2(a) 9,813
Rental property operating expenses.... 3,385 (499)2(b) 2,886
Minority interests.................... (3,448) 3,150 2(d) (298)
Other................................. 7,124 296 2(a) 7,420
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Total expenses................... 70,118 32,365
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Income before income taxes............ 8,033 12,348
Income taxes.......................... 5,867 5,867
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NET INCOME....................... $ 2,166 $ 6,481
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Earnings per Class A share........... $.08 $.23
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Weighted average number of Class A and
equivalent shares outstanding
(in thousands)...................... 24,980 24,980
The accompanying notes and management's assumptions to the consolidated
statement of income are an integral part of this statement.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
NOTES AND MANAGEMENT'S ASSUMPTIONS
TO PRO FORMA
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995 (UNAUDITED)
1. BASIS OF PRESENTATION:
The Company sold all of its interest in its food processing subsidiary, Pri
Ha'emek (Canned and Frozen Food) 88 Ltd. ("Pri Ha'emek") to Agrifarm
International Limited ("Agrifarm"), a British company.
The accompanying pro forma consolidated statement of income is presented as if
the disposition transaction occurred on January 1, 1995.
The pro forma financial statement should be read in conjunction with the
historical financial statements and notes thereto of the Company as of December
31, 1995. In management's opinion, all material adjustments necessary to
reflect the effects of the disposition transaction by the Company have been
made.
The pro forma consolidated statement of income is not necessarily indicative
of what the actual results of operations of the Company would have been
assuming the disposition transaction had been completed as of January 1, 1995,
nor is it necessarily indicative of the results of operations
for future periods.
2. ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(a) to reflect the disposition of the Company's food processing segment,
which represents Pri Ha'emek's operations.
(b) to eliminate Pri Ha'emek's rental income and expenses.
(c) to eliminate the gain on sale of Pri Ha'emek's real estate rental
property.
(d) to eliminate minority interests in Pri Ha'emek.
3. ADDITIONAL INFORMATION
As a result of the disposition transaction, the Company recorded a tax benefit
in the amount of $4.1 million which was reflected in its financial statements
for the nine month period ended September 30, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
AMPAL-AMERICAN ISRAEL CORPORATION
Date: January 7, 1997 By: /s/Lawrence Lefkowitz
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Lawrence Lefkowitz, President
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