Israir and the Brown Hotel chain are establishing a hotel company

Israir and the Brown Hotel chain are establishing a hotel company. The airline, which is controlled by Rami Levy, and the hotel chain owned by Nir Weizmann, Leon Avigad and Nitzan Perry, are establishing a company with the aim of purchasing hotels abroad, initially in Greece, which will be managed by the Brown chain and marketed with Israir vacation packages.
These are hotels that will be integrated into the vacation packages that Israir will offer its customers. One of the goals of Rami Levy as the new controlling owner of Israir is to develop the airline's hotel business. Vacation packages are the airline's most profitable product, more than selling airline tickets.
Ownership of the hotels marketed in the package will allow Israir to lower the price to the consumer. Israir will hold 25% of the new company and Brown through a Cypriot company will hold 75% of the joint venture. The possibility is being examined that Brown will join as a small partner in Israir, which will allocate it 5% of its shares as payment for its share in the joint company.
Israir has undertaken to make every effort to promote and market the hotel rooms, which will be owned by the joint venture, through vacation packages it sells to its passengers, and in return will receive the rooms at a discounted price not exceeding 90% of the price sold to wholesalers or individuals. The parties will set annual sales targets, and Israir is entitled to bonus commissions if it meets the target in favor of the partner property owners.
At the same time, Levy was preparing for the issuance of Israir in October. The company announced that it met state conditions to advance government assistance payments of $ 16 million ($ 9 million has already been given and another $ 7 million remains). According to a report by BG. Ei, the controlling shareholder of Israir, the company has transferred a written undertaking according to which by October 31, 2021 and at most until April 2022, Israir will raise capital through the issuance of shares and options. Prior to the resurgence of the corona, it was estimated that the issue would be carried out at a company value of NIS 400 million. The company also pledged that if the raising is not carried out by October, Israir will receive owner loans in the amount of $ 8 million, which will be repaid only after the issue.
Leon Avigad, co-founder of Brown, told Ynet: "Brown and Israir have already identified 4 hotels in Greece for purchase, all active and working for years in Athens, and two more hotels - one to the coast, an hour's drive from Athens, and one in Crete. Establishment of bars, redesign, fitness club and restaurants. This is a total purchase of 600 rooms. All hotels will be at the 4-star level, except in Crete - where the hotel will be branded as a five-star deluxe.
Uri Sarkis, CEO of Israir: "Our goal is to strengthen our position not only in Greece but in places where Israir's activity is particularly strong. Destinations like Montenegro, Georgia, Bulgaria etc. Israir is the largest tourism organizer in Israel. "In the past year, it has been ranked as the second company at Ben Gurion Airport after Elal, and our marketing and sales force serves as a significant lever for hotel development. Today, Brown operates 21 hotels in Israel and 4 in Europe, and is building another 21 hotels."