IDB Development has received a NIS 90 million offer to acquire Israir Airlines and Tourism Ltd. from former pilots association head Koby Brot on behalf of a group of investors. Brot's offer is to buy the airline 'as is' without undertaking due diligence. The offer includes a strict time schedule, which requires an answer by June 25 and the signing of a full agreement by July 7.
Brot and his unnamed investors also demand that Israir does not enter into negotiations with any other buyers unless they offer more than 20% above NIS 90 million. Brot's consortium is prepared to deposit NIS 10 million if negotiations begin. NIS 90 million is half the price that IDB was asking for Israir before the coronavirus crisis.
Brot said, "Given the condition of IDB, on the one hand, and the sensitive situation of Israir and the sector on the other hand, we assume that our offer will be considered carefully, especially due to the fact that it does not preclude checking out the market for any other buyers wanting to make another offer to IDB.
The offer expresses the confidence of the pilots in the company and its management but reflects a low price, despite the current problematic nature of the aviation industry.
Unlike Arkia Airlines Ltd., which has grounded its entire fleet and put its employees on unpaid leave, Israir is operating four daily flights from Ben Gurion airport to Eilat and other 'rescue' flights from Europe, with 40% of its staff.
Financially troubled IDB has been trying to sell Israir for the past two years.
Israir CEO Uri Sirkis told "Globes," "The offer demonstrates the strength of Israir and its management and the connection between the management and the pilots and it is a great compliment that in the midst of the coronavirus crisis somebody offers NIS 90 million ($25 million). In addition, it should be taken into account that Elsztain (IDB's controlling shareholder) took a $5 million loan that has to be paid. Together with what the pilots must be paid as part of their terms etc., I believe that the deal will reach $35 million and at the peak of the coronavirus crisis that fills us with pride."
Published by Globes, Israel business news - en.globes.co.il - on June 18, 2020
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