El Al Israel Airlines (LY, Tel Aviv Ben Gurion) is set to be renationalised after its board, on Sunday, voted in favour of embracing a Ministry of Finance proposal which will unlock USD400 million worth of critically needed liquidity.
Under the proposal, the state will guarantee up to 75% of a USD250 million loan to El Al and will also purchase all shares not acquired by the public in an upcoming share offer. The equity buy-in is benchmarked at the airline's average share price for May 2020 and is valued at USD150 million. Overall, the state will gain a 61% stake in El Al once the share issuance is completed, expected around early October.
However, the government has said it sees the buy-in as a temporary measure as as soon as the airline's finances stabilise, it intends to sell its shares back to the private sector. Last week, Haaretz newspaper said an unnamed Israeli citizen had already shown an interest in the airline.
At present, the Moses-Borovitz family controls El Al via Knafaim Holdings, a tourism and aviation services firm.
