The board of directors of El Al has consented to a meeting with Eli Rozenberg, who has made an offer for a controlling stake in the airline and received a control permit from the Government Companies Authority, Globes reported Monday. After a flurry of correspondence, Rozenberg’s attorneys have received a letter from El Al’s attorney agreeing to a meeting.
The El Al board is, however, demanding a meeting with Rozenberg himself and not with his representatives as he proposed. El Al’s attorney, Dori Klagsbald, wrote, “My client requests that your client should participate personally in the meeting,” adding that “it is not clear why your client should not answer the basic questions we shall ask simply and clearly,” and mentioning “the lack of an answer to the question whether in the acquisition process your client in fact represents his father and/or other investors, and a lack of detail concerning his financial and business capacity.”
Klagsbald refers to Eli Rozenberg’s offer to buy control of El Al without presentations for NIS 260 million. Rozenberg is the son of U.S.-based businessman Kenny Rozenberg, whose business is mainly in medical services.
In his letter to Adv. Adi Zaltzman of Shibolet & Co., who represents Eli Rozenberg, Klagsbald asks for a response concerning a legal proceeding that took place between the U.S. government and the State of New York and Kenny Rozenberg’s Centers Plan for Healthy Living. Klagsbald states that Centers Plan for Healthy Living “filed, and caused third parties to file, false claims to obtain money from state authorities,” and that “in the settlement to remove the fraud allegation made against it, the company owned by Rozenberg agreed to pay to the U.S. government and to the State of New York compensation in the sum of $1.65 million to remove the claims that it had defrauded the state…. My client requests to receive for its perusal the statements of claim in connection with the above-mentioned proceeding.”
While El Al corresponds with the only potential buyer who has so far submitted a bid for control of the company, it is supposed to be moving ahead with a $150 million equity offering due to take place by the end of August. The government has undertaken to buy the shares if the public fails to take them up, after which El Al will be able to obtain a loan of $250 million with a 75% state guarantee. In order to encourage El Al to expedite the offering, the Finance Ministry will allow the company to draw on surpluses accumulated in the workers severance pay fund in tranches up to a total of NIS 230 million.