Reluctant El Al Gives in to Bailout Terms

YERUSHAYALIM -
el al
El Al workers protesting in May outside the Finance Ministry, against the company’s plan to lay off workers. (Olivier Fitoussi/Flash90)

After months of difficult negotiations, El Al agreed on Monday to a bailout deal that might once again make the airline a government entity, Globes reported on Monday.

The agreement calls for the airline to receive a $250 million government-backed loan, with guarantees for 75 percent of the loan in case the firm defaults.

It also includes a share offering on the Tel Aviv Stock Exchange to raise $150 million to keep the company going, which is buckling under a debt load of more than $2 billion.

The stock offering reportedly will stipulate that the state must buy any unsold shares, meaning that the state could well become the majority stakeholder in the airline, with some 61 percent.

El Al management had resisted the deal, which also requires economizing measures such as the firing of 2,000 workers.

The airline and the unions are expected to comment publicly later on Monday.