Free Loan Keeps El Al Afloat

YERUSHALAYIM -
An El Al airplane parked at Ben Gurion International Airport. (Yossi Aloni/Flash90)

El Al Airlines received a $10 million owner’s loan (without interest) and a $15 million advance from the Finance Ministry for security costs, while it continues its search for the $400 million loan that it needs to get through the current crisis, Globes reported on Thursday.

The combined $25 million – plus another $8 million for December security – constitute a stopgap that will enable the national carrier to improve its cash flow situation and repay some debts, including to customers whose flights have been cancelled.

But it won’t erase the “going concern” qualification attached to the third quarter financial report, which awaits the major infusion of $400 million.

In the meantime, El Al has been exploring different options, such as raising a bond. A request submitted to the Ministry of Finance to increase the government guarantee for any loan or bond from 75% to 82.5% has so far not garnered an official response.

The Ministry told Globes that the matter is being discussed. Market sources believe that if El Al can find a bank to extend the loan, then the Ministry will raise the guarantee, but not if bonds are issued.