Israel’s El Al Airlines is now controlled by a 27-year old yeshiva student born in the US, and it happened after a public share offering part that is part of a government condition for the carrier that they will receive a $250 million loan that is 75% secured by the government.
Kanfei Nesharim Aviation’s Eli Rozenberg bought $107 million of the shares that meant he had a 43% stake in El Al Airlines, as reported by his spokesman on Thursday. Eli Rozenberg lives in Israel, and his father, Kenny Rozenberg, is the chief executive of Centers Health Care, a New York-based nursing home chain.
The government also purchased a 15% stake for $34 million, and El Al’s Knafaim Holdings, the current owners lost almost 23% of their stake in the company. Rozenberg had offered to shift $75 million back in July into the airline for a 44.99% stake in the business.
The deal needs approval from the finance committee of parliament. The spokesman for the committee, Kanfei Nesharim, mentioned a meeting between Rozenberg and the ministry officials next week.
Once the deal goes through, Eli Rozenberg will surely make drastic changes on the board to move the cash-strapped business forward. Nesharim mentioned it would put almost all of its investment in improving the airlines’ business for the better and to improve its food service.
El Al Airlines stopped any scheduled passenger flights last March, during the onset of the pandemic. Israel also closed its borders to foreigners, and citizens returning from other countries.
The airlines announced that by October 1st, they will resume flights to Athens, then daily flights to New York, London, and Paris by the 12th of October. They also reported losses for two years and incurred debt just to upgrade its fleet. The government is also making El Al Airlines slash costs along with the share offering.