El Al has asked the Finance ministry to postpone issuance of the shares it was required

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by Ifi Reporter Category:Agriculture Jul 26, 2021

El Al has asked the Ministry of Finance to cancel or postpone the issuance of the shares it was required to carry out under an agreement with the state, until the end of July 2021.
El Al received a payment of $ 210 million from the state in early May 2021 for the flight services of the aircraft security system for the next 20 years. As part of the agreement, EL AL undertook to issue shares, options or mix of the two by the end of July 2021, with a minimum amount of $ 105 million. The controlling owner of El Al, Eagles' Wings, owned by Kenny Rosenberg, has pledged to order at least $ 43 million in an IPO.

El Al has not yet issued an immediate report to the stock exchange, although the issue is expected to take place within five days at the latest, and although the company has not planned to carry it out for at least a week. Under the agreement between the state and El Al, non-compliance with this obligation was defined as a fundamental breach of the agreement.
El Al, together with Israir and Arkia, last week addressed Prime Minister Naftali Bennett calling for an urgent discussion on the state of Israeli aviation, noting that the government's decisions include imposing an obligation to isolate other countries for the vaccinated, postponing the entry of vaccinated tourists and sweeping isolation for children. For their ability to survive the crisis.
The companies even sought compensation for the aviation industry, as with all industries in the economy, an unanswered request. They also sought to abolish the requirement that airlines hold an IPO in July and equip themselves with aircraft. The companies argued that in the current state of affairs in the aviation industry there is no room for issuing or purchasing additional aircraft.
El Al is suffering from a cash shortage following Prime Minister Naftali Bennett's request not to fly. This is after a relatively good performance in July 2021, when the Airports Authority expects to ask about Tetis 204,000 passengers (22% market share at Ben Gurion Airport) with 71% occupancy, Israir Tethys 52,000 passengers with 54% occupancy and will be the sixth largest airline At Ben Gurion Airport, and Arkia will fly 33,000 passengers with an occupancy of 62% and will be the seventh largest company at Ben Gurion Airport.
The Prime Minister's call reduces the number of orders and significantly reduces the amount of advances the company receives from its customers - which is one of the main sources of the company's working capital.
Another part of the distress stems from the return of sick workers as part of preparations for a return to routine aviation activities that are not currently being realized due to the spread of the Delta variant.
El Al reported yesterday that it had extended the residency to 1,371 of its employees compared to 2,225 employees for whom unpaid leave was extended on June 17, 2021, so it appears that the company has returned 854 employees from leave in the last five weeks.
In the meantime, EL AL is preparing for further streamlining, which is estimated to include the dismissal of an additional 300-400 employees. This is after she fired 1,900 employees after the agreement between her and the state came into force. At the heart of this agreement was a $ 210 million inflow to the company.
Yesterday, a meeting took place between Amikam Ben-Zvi, Chairman of El Al, Daryl Hegler, Director of El Al and partner of Kenny Rosenberg, the controlling shareholder, and Chairman of the Histadrut, Arnon Bar-David. At the meeting, EL AL representatives brought to the attention of Bar David the need for further efficiencies due to the prolongation of the corona crisis, which repeatedly causes a postponement back to full activity in the aviation industry.

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