Africa-Israel Investments (TASE:AFIL01; AFIL1) does not plan to bid for El Al. Africa-Israel chairman Lev Leviev denied today that he intended to buy shares scheduled to be issued on the Tel Aviv Stock Exchange in June.
Commenting about the El Al workers committee plan to declare a labor dispute, a senior government source close to El Al’s privatization said a strike at the airline, even for only three days, would lead to its collapse and liquidation. The reason is the airline’s serious cash flow problem. El Al’s loss soared 148% to $33.5 million in the first quarter of 2003.
El Al workers may strike over their demand that $209 million be transferred to their compensation fund, the amount they allege was withdrawn from it.
The Government Companies Authority, which is negotiating with the workers committee, claims only $30-70 million was withdrawn.
The government source added that the government would not accept any radical action by El Al’s workers, similar to their threats in the 1980s to burn its fleet if their demands were not met. “This time,” said the source, “any such action would lead to the immediate closure of the airline and the transfer of its routes to other airlines.”
Nochi Dankner, the chairman of Ganden, which owns Israir, is mulling the possibility of participating in the acquisition of El Al. However, it is believed that Gandan’s recently completed acquisition of IDB Holding Corp. (TASE:IDBH) will prevent it from making another major acquisition at this time.
Ganden stated in response, “The issue of participating in the acquisition of El Al will be raised at the group’s management meeting in the coming days.”
Published by Globes [online] - www.globes.co.il - on May 25, 2003