El Al Israel Airlines secures $51m bid for joint control

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FILE PHOTO: The logo of Israel’s El Al Airlines is seen during a ceremony marking the arrival of the airline’s first order of 16 Boeing 787 Dreamliner aircraft, at Ben Gurion International Airport, near Tel Aviv, Israel August 23, 2017. REUTERS/ Amir Cohen

JERUSALEM (Reuters) – Russian-Israeli businessman David Sapir has offered to acquire joint control of financially troubled El Al Israel Airlines ELAL.TApromising to use his business connections to bring the Israeli flag carrier back to profitability.

Sapir, whose businesses include infrastructure, telecommunications and tourism, offered to pay $51 million for 190 million new shares of El Al, the same number of shares held by majority shareholder Knafaim Holdings KNFM.TAand a 20% premium to the closing price of El Al stock on Tuesday in Tel Aviv.

El Al has been hit hard by the coronavirus outbreak and is in advanced negotiations for a government bailout to avoid bankruptcy. It reported losses for two consecutive years and racked up debt to renew its fleet, suspended flights when Israel closed its borders and laid off most of its employees.

A spokeswoman for Sapir said the El Al board planned to discuss Sapir’s plan later on Wednesday.

Sapir’s offer, published by El Al in a regulatory filing, said he would be able to secure a $400 million loan at a low interest rate from Deutsche Bank while using his business ties to saving El Al millions of dollars a year in jet fuel costs.

He also said he would forge strategic partnerships for El Al to increase revenue.

El Al has received two other proposals but its board has not yet approved any of them.

The Israeli government has offered to back $250 million in bank loans in return for El Al issuing $150 million worth of stock, which the state will buy if no one else does under the agreement. a public offer.

El Al made history this week when a flight carrying US and Israeli delegations to the United Arab Emirates entered Saudi airspace, the first known action of its kind by an Israeli commercial airline.

Reporting by Steven Scheer; edited by David Evans

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