Kenny Rosenberg owner of El Al wants to increase his holdings in the company by convert part of his loans into El Al's shares

Kenny Rosenberg, the controlling owner of El Al, wants to increase his holdings in the company. The company's board of directors appointed an independent committee to examine the proposal of Rosenberg - the controlling owner of Kanafi Nesher Company, which controls El Al - to convert part of the owner's loans in the aggregate amount of 70 million dollars into El Al's shares. The board of directors also hired the services of a consulting firm to provide a valuation to El Al, which would determine at what value Rosenberg would convert the loans he gave to El Al to the company's shares.
Rosenberg currently owns 39% of El Al's shares (+0.46% 373.1), after investing 158 million dollars (NIS 543 million) in two issues of shares and options and their exercise. Rosenberg also gave the company loans in the cumulative amount of $70 million, as part of an agreement from November 2021, and as part of an aid agreement in January 2022, under which El Al received a grant of $50 million from the state as compensation for the economic damage caused to the company following restrictions imposed by the government on air traffic during the outbreak of the micron strain .
The conversion of the loans given by Rosenberg to the shares of El Al according to their current market value will increase Rosenberg's holding in the shares of El Al from 39% to 55.8%. According to section 328 of the Companies Law, a purchase that will result in the buyer's share exceeding 45% of the voting rights in the company can only be made by means of a special tender offer. In its announcement to the stock exchange, El Al did not refer to this aspect of increasing Rosenberg's share as a possible result of the conversion of the loans Rosenberg gave to the company.
Rosenberg, who acquired control of El Al in September 2022 through a share issue, currently owns El Al shares worth NIS 249 million and options worth NIS 141 million, so he still loses NIS 153 million on his investment.
Rosenberg's appeal to El Al with the proposal to convert part of the loans he gave to the company into shares is made following a 74% increase in the company's stock from the beginning of 2022, and against the background of the tide in the tourism business and a significant improvement in El Al's financial results in the past quarter