Israel's Ministry of Finance will increase the aid it will provide to El Al Israel Airlines Ltd. (TASE: ELAL), sources inform "Globes." The financially troubled airline is struggling to obtain bank financing of $250 million despite 75% in government guarantees. El Al has asked the Ministry of Finance to give 82.5% guarantees for a loan of up to $400 million. Sources believe that the Ministry of Finance will be prepared to give the 82.5% guarantees for loans of up to $300 million.
The credit guarantees are the second part of the government's plan to prevent El Al, hit hard by the Covid-19 pandemic, from going into insolvency. The auditor attached a 'going concern' qualification to the airlines third quarter financial statement.
In the first part of the plan a public offering was held on the Tel Aviv Stock Exchange (TASE) in September with the government guaranteeing to buy any shares not purchased by the public. In the event, El Al raised $150 million, with Kanfei Nesharim owned by Eli Rozenberg buying a 43% controlling stake, while the government bought a 14% stake for NIS 116 million.
The Ministry of Finance said, "The issue of loan guarantees is being negotiated between the state and the company as well as other subjects related to implementing the assistance plan."
El Al said, "We do not comment on our discussions with the Ministry of Finance."
Published by Globes, Israel business news - en.globes.co.il - on December 8, 2020
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