The airline has received the Ministry of Finance outline and will sell its shares for five days • Various parties including Eli Rosenberg on their way to becoming controlling shareholders in the company
El Al Airlines planes // Photo: Gideon Markovich
Photo:
Gideon Markovich
The largest airline in Israel has received the outline of the Ministry of Finance, as part of which the company will go public for a five-day IPO.
El Al is expected to issue $ 150 million with a share price of 67 cents.
If the company fails to raise the full amount as part of the IPO process, the state undertook to purchase the difference.
As part of the IPO process, various parties, including the young ultra-Orthodox Eli Rosenberg, are expected to purchase shares in the company and thus become controlling shareholders.
Rosenberg had previously offered to acquire 44.99 percent of the company for an amount five percent higher than the values of the percentages, but the company’s board of directors did not approve the offer even though Rosenberg received all the necessary approvals from state institutions.
Demonstration of El Al employees, archive - 30.4.2020 // Photo: El Al Employees Committee
At the same time, there are other business people who may take part in the IPO process and try to acquire their share in the company.
The Ministry of Finance clarified that all the shares purchased by the state will be sold after 24 months, whoever represented the state will be loyal on its behalf.
Following the IPO process, El Al is expected to approach the banks again with a view to obtaining a loan of $ 250 million.
It is estimated that it will be easier for the company to raise the loan after the issue - loans that to date have not been given to the company due to its financial situation.
The two banks with which the company is in advanced negotiations are Discount and Leumi.
El Al will approach banks with a state guarantee of 75% of the loan amount.
As part of the outline, El Al is expected to lay off about 2,000 employees, reduce the company's aircraft fleet, reduce activity with suppliers and cancel less profitable destinations to which it has flown to date.
At the same time, El Al is expected to renew the company's cargo flights during the month, El Al's passenger flights are expected to return next month in a limited way to destinations with relatively high demand, such as the US, Paris and London destinations. In return, the company is expected to offer customers non-monetary compensation in order to try and deal with this crisis as well.Customers who are not interested in this type of compensation are likely to get their money back.
