Eli Rozenberg agrees to inject $75m into El Al

El Al and Eli Rozenberg / Photo: Yoav Yaari

The airline's controlling shareholder is unfazed by the demand to inject more capital before receiving state guaranteed loans.

El Al Israel Airlines Ltd. (TASE: ELAL) controlling shareholder Eli Rozenberg is unfazed by the banks' demands to inject $75 million into the airline before providing loans.

Kanfei Nesharim, the holding company by which Rozenberg controls El Al, told "Globes that, "he would do everything required in order to ensure a secure future for El Al. Rozenberg very much believes in this investment, despite the company having to cope with a difficult global crisis for the world of aviation and a third lockdown which has totally disputed its operations."

Rozenberg, 27, a resident of Jerusalem is the son of US businessman Kenny Rozenberg.

Kanfei Nesharim added, "Rozenberg invested $108 million in El Al and has extended a $10 million loan and is committed to inject tens of millions of dollars more. El Al today has more committed owners, and a professional management and board of directors with rich experience."

Last September, as part of a rescue package put together by the Ministry of Finance due to the Covid-19 crisis, which has now disrupted the airline's operations for almost a year, El Al raised NIS 505 million on the Tel Aviv Stock Exchange (TASE). Rozenberg acquired a controlling 42.8% stake for NIS 364 million, while the state bought a 14% stake and previous controlling shareholder Tami Mozes-Borovitz was left with a 15% stake.

In the next stage of the rescue package, El Al was supposed to raise $250 million debt from banks and institutional investors with government guarantees of 75% of the amount. But as the Covid-19 crisis has dragged on, the Ministry of Finance agreed that it would guarantee 82.5% of loans of up to $300 million. Rozenberg is now being required to buy more shares which will be issued.

El Al's first prospectus for raising the shares was rejected by the Israel Securities Authority because a special offer to purchase procedure is needed if the controlling shareholder wants to hold a stake of more than 45%.

Last month Rozenberg injected a $10 million owner's loan into the company and the Ministry of Finance paid El Al $15 million for aircraft security during 2021. The banks and Ministry of Finance understood that a $300 million loan will not be enough to cover the company's expenses, hence the demand for Rozenberg to inject more capital, but the longer Ben Gurion airport remains closed, even that may not be enough.

Published by Globes, Israel business news - en.globes.co.il - on February 7, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

El Al and Eli Rozenberg / Photo: Yoav Yaari
El Al and Eli Rozenberg / Photo: Yoav Yaari
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