El Al Israel Airlines (LY, Tel Aviv Ben Gurion) announced on September 15 that it would stage a government-mandated USD150 million share offering the following day that will release a state bailout package for the cash-strapped privately-owned flag carrier.

El Al will issue 753,353,000 new shares, it said in a prospectus filed at the Tel Aviv Stock Exchange, for purchase until 1800L on September 16. Israel’s government intends to buy 393,750,000 of these, enough to place the airline under government control until it finds a buyer for the stake.

However, would-be buyer Eli Rosenberg has pledged to buy shares worth USD101 million, which would give him control. A second potential buyer, David Sapir, wants to invest less than this and share ownership with current parent Knafaim Holdings. It is not clear if he will participate in the offering.

Israel’s government has promised that after the offering, El Al will receive a 75%-state-guaranteed USD250 million bank loan. As previously reported, in an effort to end the protracted process, the government told the airline last week that it had until September 17 to hold the offering.

El Al will sell the shares at a minimum price of ILS0.67 shekels (USD0.20) per share, slightly below the share price on September 15. In recent days, the company has met investors and conducted a roadshow in Israel to promote the event, the business daily Globes reported.

A third interested party, Meir Gurvitz, announced on September 15 that he was ending his bid citing the Ministry of Finance’s refusal to allow El Al to make a private placement instead of a public offering.

“In the circumstances that have arisen, and in light of the opposition of the Ministry of Finance to a private placement, I have no intention of entering into a deal for the purchase of control of El Al,” he said in a statement.