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Control of Israel's El Al Airlines bought by 27-year-old student

Published 09/17/2020, 09:49 AM
Updated 09/17/2020, 09:50 AM
© Reuters. An Israel El Al airlines plane is seen after its landing following its inaugural flight between Tel Aviv and Nice at Nice international airport
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By Steven Scheer

JERUSALEM (Reuters) - A 27-year-old U.S.-born yeshiva student has secured control of El Al Israel Airlines (TA:ELAL) following a public share offering that was a government condition for the carrier to receive a 75% state-backed $250 million loan.

Eli Rozenberg's newly created Kanfei Nesharim Aviation bought $107 million of shares that would give him a nearly 43% stake in Israel's flag carrier, his spokesman said Thursday.

Rozenberg, who resides in Israel, is the son of Kenny Rozenberg, chief executive of New York-based nursing home chain Centers Health Care.

The government bought a 15% stake for $34 million while the holdings of El Al's current owners, Knafaim Holdings (TA:KNFM), fell to 15.2% from 38%.

Rozenberg in July had offered to funnel $75 million into the airline in return for a 44.99% stake.

The deal needs approval from parliament's finance committee.

Kanfei Nesharim's spokesman said Rozenberg will meet Finance Ministry officials next week.

He said once Rozenberg is approved, he will seek to make changes to El Al's board and elsewhere to move the cash-strapped carrier forward. Kanfei Nesharim said it would invest heavily in improving El Al's service and to upgrade its food service.

Rozenberg has surrounded himself with advisers including Jason Greenblatt, a former adviser to President Donald Trump.

El Al suspended scheduled passenger flights in March at the outset of the coronavirus outbreak when Israel closed its borders to foreign citizens.

Earlier on Thursday, it said it would resume flights to Athens on Oct. 1, followed by daily flights to New York, London and Paris starting Oct. 12.

The airline has reported losses for two years and racked up debt to renew its fleet. In addition to the share offering, the government has required El Al to slash costs.

© Reuters. An Israel El Al airlines plane is seen after its landing following its inaugural flight between Tel Aviv and Nice at Nice international airport

Most of its 5,940 employees remain on unpaid leave and El Al said it would gradually bring a small number back.

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