El Al's Board of Directors decided: The company is on its way to nationalization

El Al's Board of Directors decided: The company is on its way to nationalization. At a meeting today, the board approved the outline proposed by the Treasury. The outline includes a $ 250 million state guarantee loan, including the issuance of $ 150 million in Al rights. The state has pledged to buy the shares as part of the offering, giving it 61% of the airline's shares.
By doing so, El Al will return to the state, 15 years after it was privatized and sold to a wing company controlled by the Borowitz family.
The decision was made after weeks of consultations between the board of directors and the lawyers he hired and professional counselors. Representatives of the winged company, the controlling party, also supported the proposal.
The state, which holds a gold stake in Al, will appoint a trustee to the company, which will work to sell it at maximum speed to an outside investor.
The Treasury hopes that the sale process will be very short, and will be carried out already when El Al rights are issued; The new investor will buy most of the shares in the offering, becoming the controlling shareholder, so the state will not even have to appoint a trustee.
Before the Board of Directors, another alternative was proposed by the Treasury, which included a $ 400 million State guarantee loan at 82.5% of the amount, and a $ 150 million capital injection by El Al's controlling shareholders.
A basic condition for maintaining the chosen outline is the signing of new labor agreements with the four employees' committees in the company, when it can now be expected that the pilot committee, which was the hard nut to negotiate with management and oppose continued wing control, will sign the agreement in the hope that new owners will find capital To the company.
The decision rescues El Al from insolvency because the company's box office, which shuttered all of its planes this week and finished the first quarter of the year with a $ 140 million loss - is nearly empty, and the continued closure of the sky means it will soon have no revenue. It is estimated that preparations for the IPO to transfer the ownership of Al to the state will take about two months.