El Al Israel Airlines Ltd. (TASE: ELAL) reported this evening that it has raised NIS 250 million ($77 million) by issuing 1.25 billion options to the public on the Tel Aviv Stock Exchange (TASE). The options given can be exercised at a price of NIS 0.30 per share, so that full exercise of the options would increase the capital raised by an additional amount of NIS 375 million ($116 million).
El Al was required to raise $75 million in order to receive $300 million in loans with an 82.5% guarantee from the state, as part of its financial recovery plan. Controlling shareholder Eli Rozenberg was committed to buy at least $50 million of the options and the airline said that he fulfilled his commitment.
El Al's CEO Avigal Sorek also committed to take part in the offering, he told investors in a zoom call, for an amount equal to his salary for the next six months.
As part of today's offering, El Al offered between 750 million to 1.25 billion options for four years at NIS 0.30 per share. The options were offered to investors in an auction with a minimum price of NIS 0.20 per share but the options were taken up at a price of at least NIS 0.50. The options were oversubscribed with demand for 1.67 billion options but the company chose only to issue the maximum amount of 1.25 billion options.
Before the auction, El Al's share price was NIS 0.65, so the options were sold at a 23% discount. El Al's share price finished trading today at NIS 0.59.
El Al chairman David Brodet told "Globes," "We were pleasantly surprised and fully achieved our target."
Regarding the $300 million in loans, Brodet said that El Al is in talks with Israel Discount Bank (TASE: DSCT) and other financial institutions and he expects the loan to be received by Pesach.
Published by Globes, Israel business news - en.globes.co.il - on February 16, 2021
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