Struggling carrier El Al could be flying back into state hands, as the company’s chairman reportedly accepts a government bailout that will give Israel some 61 percent of the firm.
Under the reported deal, the airline will get a $250 million government-backed loan, with guarantees for 75 percent of the loan, in case the firm defaults.
It also includes a share offering on the Tel Aviv Stock Exchange to raise $150 million to help prop up the equity of the firm, which has more than $2 billion of net debt.
Parking airplanes and other equipment at Ben Gurion airport on April 6, 2020. (Moshe Shai/FLASH90)
The deal also includes efficiency steps that may lead to the firing of 2,000 workers.
The stock offering will come with a caveat that the state must buy any unsold shares, meaning that the state could once again end up as the majority stakeholder in the airline.
The company has been severely hobbled by the coronavirus crisis, and last month shut down all air operations amid an ongoing labor dispute.
The airline was privatized in 2004 and is currently controlled by Knafaim Holdings Ltd, which will see its shares diluted.
A spokesperson for the airline says an official statement will be released shortly.
Help us report truthfully on social media
As a multimedia journalist, my job is to take the quality, fact-based journalism produced by The Times of Israel newsroom and make it accessible across every platform — from Instagram posts to podcasts to short-form videos.
This is how many, especially young people, consume news these days. But misinformation is rampant on social media. Our team at ToI produces accurate, responsible short-form reporting on Israel and the Jewish world.
If you believe in the importance of factual social media journalism, please consider joining our reader support group, The Times of Israel Community. Your financial support is essential to sustain responsible multimedia reporting.
We’re really pleased that you’ve read X Times of Israel articles in the past month.
That’s why we started the Times of Israel - to provide discerning readers like you with must-read coverage of Israel and the Jewish world.
So now we have a request. Unlike other news outlets, we haven’t put up a paywall. But as the journalism we do is costly, we invite readers for whom The Times of Israel has become important to help support our work by joining The Times of Israel Community.
For as little as $6 a month you can help support our quality journalism while enjoying The Times of Israel AD-FREE, as well as accessing exclusive content available only to Times of Israel Community members.
Thank you, David Horovitz, Founding Editor of The Times of Israel
From the Liveblog of
Monday, July 6, 2020
Add ToI as a Preferred Source on Google
