Israelair is expected to receive a 75% state guarantee for a loan of NIS 100 million

Israelair, controlled by Eduardo Elstein, is expected to receive a 75% state guarantee for a loan of NIS 100 million from the International Bank and Mizrahi Tefahot Bank. The loan will be for a period of 3 years, with the first year Israir, managed by Uri Sirkis, will not be required to repay principal and interest payments.
Israir, like the other two Israeli airlines, El Al and Arkia, was severely hit by the Corona crisis and had to disable all its passenger flights and settle for Israeli flights and rescue flights.
The company also struggles with controlling shareholder Eduardo Elstein, controlling shareholder of IDB Development, which received a $ 5 million loan from Israelier whose repayment period was extended several times by the end of March 2020. However, ID Development did not meet the due date and sent Israir to seek Finance Ministry Assistance.
Following the decision of the controlling shareholder not to support the company, Bank Leumi exercised its right under the condition which allows it to act for early repayment of a loan in the event of insolvency of the owner, and forfeited Israir's deposits of $ 3 million.
Earlier this week, the team that approved Israelis' state guarantee rejected El Al's request for $ 400 million in state loans and state guarantees, because he had not been convinced of the company's repayment capability - which already carries $ 1.8 billion in financial debt.
Avi Hurmero, chairman of Arkia, issued summons to board members on Wednesday to plan a resolution that would lead to the dissolution of the company - but came back because of a furious response from employees who hold 30% of Arkia's shares and the Histadrut.
Avi Edri, who holds the transport portfolio in the Histadrut, said: "The company cannot be dismantled. A 75% majority is needed to approve the decision, so there is no chance of being approved. I hope the owners get together." Hurmero denied issuing the summons, but said Arkia would not survive unless her state loan application for $ 25 million was approved. Hurmero said the company filed the application a month ago, but has not received a response at this time and the recent talks between the company's management and the Treasury staff discuss the aid requests two weeks ago. Hurmero confirmed that the company's employees who were leaving the UAV were asked to return the leasing vehicles, but explained that the move was due to tax considerations.
Arkia, which is owned by the Nakash family (70%) and a strawberry corporation of the company's employees (30%), owns 7 aircraft, including 3 Airbus A321s and 4 Amberair aircraft. Hurmero noted that the company is currently engaged in operating Israeli cargo and rescue flights.
The company entered the Corona crisis after a painful streamlining process, in which 100 of its 660 employees were laid off. The move came after demand for flights to Eilat, which is the company's main profit center, dropped sharply following the closure of Dov Airport and the closure of the old Eilat airport in favor of Ramon Airport.