Israel’s Finance Ministry informed El Al on Sunday that it must publish an offering of shares by September 10 in order to receive financial assistance from the government via the ministry’s bailout plan.
The public offering’s original deadline of August 31 passed as El Al investigated offers from several bidders for the beleaguered company. Finance Ministry Director-General Keren Terner-Eyal set the new date for the offering and also presented a new plan to El Al delineating the conditions it must fill to receive state aid, Globes reported.
El Al is required to raise a minimum of NIS 505 million by selling its shares in order to receive a state-backed loan. The offering, which is scheduled to take place on September 15, will be comprised of 753,353,204 shares at a minimum price of NIS 0.671. The government will submit a bid for 393,372,908 shares at the minimum price if there are no other buyers.
The Finance Ministry has committed itself to selling or transferring the shares within 24 months of the allocation. El Al will not be permitted to determine who purchases the shares.
Following the implementation of the above steps, the government will then guarantee a loan for El Al from a financing entity for $250 million. Terner-Eyal stated in her letter to El Al that the government will not allow any changes to the plan.
The plan allows for the government to back a loan from a recognized foreign bank (such as Deutsche Bank, the lending bank in David Sapir’s bid).
The Finance Ministry’s plan must still be approved by the government and discussions on the matter are expected to take place this week.
(YWN Israel Desk – Jerusalem)