Treasury chief urges El Al to move ahead on Rozenberg bid

Keren Terner-Eyal

Keren Terner wrote to the El Al board after meeting with Eli Rozenberg's representative Amikam Ben Zvi.

Amikam Ben Zvi, a representative of Eli Rozenberg, who has bid to buy a controlling stake in El Al Israel Airlines Ltd. (TASE: ELAL), met with Ministry of Finance director general Keren Terner yesterday in efforts to promote the deal.

Rozenberg has bid $75 million for a 45% controlling stake in the financially troubled airline, and deposited $15 million for the purchase in a trustee account. Rozenberg is the son of New York-based businessman Kenny Rozenberg. In his late 20s and living in Jerusalem, Eli Rozenberg has maintained a low profile, surrounded by an entourage of high profile advisors. Eli Rozenberg himself did not attend the meeting with Terner.

After the meeting Terner sent a letter to El Al's board of directors urging them to move forward with Rozenberg's bid, which would allow the injection of $75 million capital into the airline. "Without being required to identify the potential investor, and the details of the offer that is on the agenda and its quality, as long as there stands before the company the opportunity as part of which capital will be immediately injected into the company, the fact that capital is injected into the company by the investor will not detract from the above mentioned plan." The Ministry of Finance plan is a 75% government guaranteed loan of $250 million and raising capital through a public offering of shares, which the state is committed to purchase.

Terner also stresses that the injection of capital by Rozenberg would also reduce the amount of capital required to be raised through shares. In other words if $75 million were injected for a 45% controlling stake as proposed by Rozenberg, then the amount to be raised in the public offering would fall from $150 million to $75 million and the State would still be committed to buy shares that are not purchased by the public.

The lower offering would lead to the dilution of the owners share compared with an offering of $150 million, which could mean the State buying all the shares and ending up with a 60% stake and effectively nationalizing the airline - a scenario that the government wants to avoid. In her letter, Terner concluded that she is not expressing any position about the buyer, nor ruling out alternatives to injecting capital into El Al through any private placement.

Published by Globes, Israel business news - en.globes.co.il - on July 30, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Keren Terner-Eyal
Keren Terner-Eyal
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