📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

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

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.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.