To get $ 300 million loan, El Al seeks to raise $ 75 million

Israel’s national airline El Al is seeking to raise $ 75 million in capital by the third week of September to secure a government-backed loan of $ 300. Following the disruption caused by the COVID-19 pandemic, which also includes the closure of Ben Gurion Airport (TLV). While dealing with the fallout from the coronavirus, El Al made new deals with its employees, including a 30% job cut while returning five Boeing 737-800s to lessors. Depending on the demand for air transport, El Al may also return six more aircraft.

Eli Rozenberg is not impressed by the banks’ demands to inject $ 75 million into the airline. Photo: Getty Images

Looking to the future, El Al predicts that its current fleet will reach 75% of its use in 2022 and 2023 and return to full capacity by 2024. According to a report published last week in the Israeli financial newspaper Globes , El Al Major shareholder Eli Rozenberg is unfazed by having to inject $ 75 into the airline as a condition of securing the state-backed $ 300 million loan.

El Al sees a bright future

Speaking to Globes last week, a spokesperson for Kanfei Nesharim Aviation, a holding company set up to oversee El Al, said:

“Rozenberg would do whatever is necessary to ensure a secure future for El Al. Rozenberg strongly believes in this investment, as the company faces a difficult global crisis for the aviation world and a third lockdown that totally contested its operations.

Kanfei Nesharim added, “Rozenberg invested $ 108 million in El Al and made a loan of $ 10 million and pledged to inject tens of millions of dollars more. El Al today has more engaged owners, as well as professional management and board of directors with a wealth of experience.

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COVID-19 is not relevant in the long term

El Al estimates earnings before interest, taxes, depreciation, amortization, and restructuring or rent (EBITDAR) costs of $ 396 million for 2022, which will rise to $ 494 million in 2024. According to the aviation website, FlightGlobal El Al says it can cut spending by an additional $ 115 million, including a savings of $ 60 million from “lean” wages. El Al also points out that what happened to the airlines during the current medical emergency is irrelevant to understanding the long-term trend of the airlines.

El Al
El Al sees a bright future. Photo: Getty Images

El Al was able to cope with the financial difficulties created by COVID-19 with a $ 150 million share issue, which allowed Eli Rozenberg’s Kanfei Nesharim Aviation to become the majority shareholder of the airline with a 43% stake in the airline.

Eli will lead the shots at El Al

At the time of the acquisition of the shares, El Al board members claimed that the 27-year-old Israeli-American entrepreneur was just a straw man to his father Kenny Rozenberg, owner of the company. chain of New York-based nursing homes Centers Health Care.

El-Al-Maroc-Getty Flights
Eli Rozenberg owns 48% of El AlPhoto: Getty Images

To buy a controlling stake in El Al, Eli borrowed $ 100 million from his father and, despite this, says he will be in charge and his father will have nothing to do with running the airline.

While times look pretty gloomy for the airline industry, El Al looks optimistic about the future. Do you think it’s to raise the $ 75 million, or is El Al there? Please let us know what you think in the comments.

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