Assistance to El Al: $ 50 million provided that the Rosenberg family will flow a sum of $ 43 million

$ 50 million - This is the amount of assistance that the Treasury is willing to give to El Al, even though the company has requested a sum of $ 100 to $ 150 million. This emerges from the details of the outline that El Al reported to the stock exchange. In addition, the Treasury donated the assistance by injecting a similar amount - $ 50 million from the Rosenberg family, which controls the company. All this, provided that the Rosenberg family will flow a sum of $ 43 million, which it has pledged as part of the previous assistance in the amount of $ 210 million that EL AL received for flight tickets for security personnel for the next 20 years.
A new condition demanded by the Treasury: a commitment to sell a significant portion of the frequent flyer club and to transfer the proceeds to the company's coffers. Also, until the aid is repaid, the engine owners - the Rosenberg family - continue to pay dividends, repurchase shares or stakeholder transactions.
The assistance will be provided in the form of convertible bonds, ie a loan, without collateral and without interest, linked to the dollar or the price index.
The Treasury explains that the amount is intended to improve the cash flow situation of the company that suffered due to the fourth wave of the corona from a decline in revenue and will allow it to move cash flow over the next 12 months.
Such assistance is conditional not only on the inflow of funds from the owner, but on additional efficiency measures required by the Treasury to reduce the company's costs, including the sale of aircraft, including details to the Treasury of which and how many aircraft are involved.
The Treasury has previously said that the company must adjust its cost structure to actual operations, which means that in their view, despite layoffs of 2,000 employees, the company's structure is still too large and since the corona will probably remain for the next two or three years, the company must prepare for a transient crisis.
In addition, EL AL will be required to commit to reducing the amount of monthly payments it owes in respect of the Company's financial debt. That is, the company needs to reach an agreement with the banks and its aircraft suppliers and others regarding the redeployment of payments and their postponement.
The Ministry of Finance also claims that additional efficiency measures will be required and that the assistance will be received according to the pace of implementation of the above reforms.
At the end of the three years, El Al will be able to repay the loan, convert it into shares or make an issue to the public, in which case the state will receive shares at a 10% discount. The state, for its part, undertakes that these are dormant shares and does not intend to interfere in the day-to-day management or nationalize the company.
Mal Al responded: "We are in negotiations with the Treasury and as the talks mature and a binding agreement is reached, we will report."