The Israeli government approved an assistance package of nearly NIS 750 million to aid the country's ailing aviation industry following the Covid-19 crisis.
As per the inance Ministry statement, the government approved agreements signed between the Ministry and country's two largest airlines, El Al and Israir. Under the agreements, the aid to El Al and Israir is structured as an advance payment for flight tickets for governmental security guards for a period of 20 years.
The Finance Ministry also conditioned the deal on El Al’s controlling shareholders contributing to the financial stability of the company. El Al will be required to raise USD 105 million through a public offering, with controlling shareholder, Eli Rozenberg, buying at least USD 43 million of the shares.
In addition, El Al also agreed not to distribute dividends or repurchase shares, for the next five years. It also agreed to reduce by 15 percent the salaries of the company’s management and the chairman of the board.
The Ministry conditioned the payments in that the shareholders would also contribute to strengthening the financial stability of the companies. The aid plan replaced an outline previously proposed to El Al to provide a state guarantee for a bank loan.
Minister of Finance Israel Katz said "the support is provided due to the difficult and abnormal situation that the Israeli aviation is facing, and to ensure the resilience of Israeli civil aviation".
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