"El Al must fly on the Sabbath, because there is no other way to survive in the world of global aviation," El Al Israel Airlines Ltd. (TASE: ELAL) controlling shareholder Izzy Borovich told "Globes" today. Borovich owns 17% of Knafaim Holdings Ltd. (TASE: KNFM), which owns the 39.3% controlling interest in El Al, but he has no active position in the airline. He added, "We must change El Al's corporate culture, changing this is the most important thing."
As for the First Israel Mezzanine Investors Fund (FIMI) Knafaim deal, Borovich said, "This is a very good deal for the owners, El Al, and its employees. El Al's employees should grab the opportunity that FIMI is offering them and strive to reach a settlement with management, because this is a rare opportunity which will not be repeated."
Negotiations between El Al's management and employees on a new labor contract are floundering and still only in the preliminary contacts stage.
Borovich, like El Al executives, believes that the FIMI deal will be implemented, "because that is FIMI and Ishay Davidi's profession - to take companies, invest in them, and rebuild them. I definitely think that Davidi will succeed in doing to El Al what it has failed to do for itself." He added FIMI's investment would also be good for the country, saying, "If Israel does not have a strong national carrier, the country will have a problem."
Asked how Knafaim intends to repay its NIS 280 million bond debt and NIS 45 million bank debt, Borovich said, "Money is the least important thing right now. What's important now is to change El Al's corporate culture. Debts must be repaid. Debts are money to buy planes. Other airlines in the world have financing debts. We don’t have a problem; we'll repay everything. Part of the $5 million that Knafaim will get from the FIMI deal will be used for current operations."
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2013
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