Israel’s El Al plans $105mn share issue before mid-3Q21

El Al Israel Airlines (LY, Tel Aviv Ben Gurion) plans to raise at least USD105 million in an offering of shares, warrants, or a mix of the two, it outlined in a stock exchange filing on April 7. The measure is a key condition to receiving a USD210 million government bailout package. El Al must hold the offering by July 31, it said, but it added that not all of the conditions to access the state aid had yet been met, “including a decision by the government on the approval of the main points of the agreement with the state.” However, on April 6, it had signed a collective bargaining agreement with its unions on state-mandated job cuts. As previously reported, last month Israel’s government agreed to buy tickets in advance for aviation security personnel worth USD210 million, covering the next 20 years, both from the ailing flag carrier and its low-cost unit Sun d’Or International Airlines (2U, Tel Aviv Ben Gurion), as part of the package of aid measures overseen by the Ministry of Finance. The funding depends on the USD105 million share issue. El Al has been forced to sack a third of its employees, 2,000 of them, among other cost cuts, while new owner Eli Rosenberg must inject more cash into the airline by acquiring at least USD43 million of the shares in the public offering. On March 25, El Al reported a pandemic-driven net loss of USD531 million for 2020, while revenue fell 70% from the previous year to USD623 million. It was its third consecutive annual loss. The carrier was forced to suspend scheduled passenger flights in March 2020, but a limited number of international routes recently resumed for its citizens, though not yet for foreign tourists. According to the ch-aviation capacities module, the most regular are from Tel Aviv Ben Gurion to Larnaca (13x weekly), Athens Int’l (12x weekly), Paris CDG (9x weekly), Kyiv Boryspil (7x weekly), and New York JFK (7x weekly).