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Under fire, Isrotel nixes plan to pay out huge dividends after taking COVID aid

Hotel chain was set to give almost $8 million to its owners after receiving a reported $11 million in government aid; says it is ‘attentive to public’s feelings’

The rooftop infinity pool at Isrotel's newest hotel, The Orient, in Jerusalem. (Courtesy Ori Akerman)
The rooftop infinity pool at Isrotel's newest hotel, The Orient, in Jerusalem. (Courtesy Ori Akerman)

The Isrotel hotel chain backtracked Monday on its plan to pay out dividends to its owners after public criticism over the fact that it had accepted government coronavirus bailout funds.

According to a statement from the Israeli chain to the Tel Aviv Stock Exchange, it canceled plans to pay out NIS 25 million ($7.8 million) to its owners “in order to be attentive to the public’s feelings on the matter.”

The company announced its intentions to pay the dividends last week. According to the Ynet news site, the hotel network received NIS 36 million ($11.2 million) in various payments from the government to enable it to continue paying employees and remain operational despite the collapse of the tourism sector during the COVID-19 pandemic.

In comments made while presenting the new budget on Monday, Finance Minister Avigdor Liberman addressed the idea of companies who had received government COVID-19 funds paying out dividends.

“Of course it is unacceptable that companies that are making profits and paying out dividends also receive state aid,” said Liberman. “This issue will be taken care of… I assume the company itself will not wait to return the funds to the government, that is our expectation before we even do anything.”

According to the Globes business news website, the hotel chain — which operates 20 hotels across the country — had a particularly successful second quarter of 2021, buoyed by a spike in domestic tourism.

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