El Al Israel Airlines Ltd. (TASE: ELAL) continues to promote the idea of bringing in a group of foreign investors to the company without the need for a permit to control the airline. The plan is also designed to allow the current controlling shareholder Tami Mozes-Borovitz to retain control of the company, or at least part of it.
Sources inform "Globes" that over the past few days, a representative of El Al has contacted Government Corporations Authority head Yaakov Kvint and asked for urgent agreement to receive the State's consent for foreign investors to hold above 24% of the airline's ownership.
The letter sent indicates that El Al is not asking for control to be transferred to foreign hands but rather that each investor would buy up to 5% of the company's shares, up to a total of 49%. The company's request is designed to increase the chances for success of the planned public offering, which according to the Ministry of Finance's deadline should take place today August 31 but is almost certain to be postponed by at least several days.
The current law requires any person or organization wanting to own a stake of 5% or more in El Al to receive a government permit. "Globes" recently reported that El Al was considering hiring US investment bank Jefferies to lead the public offering and attract foreign investors as it did with the Tel Aviv Stock Exchange's own public offering last year.
Meanwhile the race to buy control of El Al is warming up. The State has already granted 27 year-old Eli Rozenberg with a permit to buy control of the airline. Rozenberg who holds Israeli citizenship is the son of Neww York based businessman Kenny Rozenberg. Two other businessmen have also applied for a permit to buy control of El Al - US-based Israeli real estate businessman Meir Gurvitz and Israeli-Russian telecom and tourism businessman David Sapir. The Government Companies Authority has already told the Ministry of Finance that it would not have sufficient time to process the applications of these two latter suitors before the August 31 deadline for El Al's public offering.
Gurvitz has said he is happy to share control of El Al with Mozes-Borovitz through Knafaim Holdings Ltd. (TASE: KNFM), which holds a 38.3% stake in El Al. Rozenberg has bid to buy outright control of El Al with a $101 million offer for a 45% stake in the airline.
El Al has already filed a prospectus for the $150 million offering with the Israel Securities Authority through Adv. Shiri Shaham of the Yigal Arnon & Co. law firm, which declined to comment on when the prospectus would be available to the public. After the money is raised, the State will provide 75% guarantees for up to $250 million in bank loans taken by El Al to help it survive the Covid-19 crisis.
Published by Globes, Israel business news - en.globes.co.il - on August 31, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020