Eli Rozenberg Is El Al’s Likely New Owner After Share Sale

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An El Al plane takes off from Ben Gurion Airport, September 20, 2019.
An El Al plane takes off from Ben Gurion Airport, September 20, 2019.Credit: Moti Milrod

El Al raised some 505 million shekels in a public share offering on Wednesday evening.

Following the sale, control of Israel’s flag bearer is expected to pass to Eli Rozenberg, age 29, who bought an estimated 44.9% of the company’s shares.

The sale closed at the minimum set price, of 0.671 shekels a share.

Israel’s government will likely wind up with 11.5%-11.9% of El Al’s shares, after placing orders for some 395 million shares – 52% of the offering and 31.7% of El Al’s total shares. The state will ultimately be paying between 100-130 million shekels.

The stock sale on the Tel Aviv Stock Exchange was part of a government-orchestrated rescue plan for the airline. Israel’s government had pledged to buy the remaining shares not purchased by the public.

Rozenberg will likely be taking control of El Al from current shareholder Tami Mozes Borovitch, who owns the airline via the publicly-traded company Knafaim. Knafaim’s share of El Al will be cut to 15.2% after the share placement.

The buyers’ precise holdings in the company will become known once the buyers report their share figures to El Al.

Leader Underwriting led the share placement along with Leumi Partners Underwriters.

The coronavirus pandemic left El Al in dire financial straits. The company has suspended all flights, currently until the end of September. The money raised Wednesday is crucial for restarting operations at the airline.

As of late August, some 6,080 employees were on unpaid leave.

Following the share placement, El Al will renew its efforts to raise $250 million via a bank loan or bond sale with 75% state backing.

Israel’s Finance Ministry believes that after the share placement, El Al will have positive equity, after finishing the second quarter of 2020 with a $135 million equity debt. Knafaim’s ouster as controlling shareholder is also expected to make it easier for El Al to get a bank loan.

The money from the share placement and from a future loan will be used to reimburse Israeli ticket holders whose flights were canceled due to the coronavirus pandemic. El Al owes a reported $80 million to ticket holders.

El Al has 90 days or until October 1 to reimburse customers.

El Al also owes $125 million for leases on its airplanes and to pay other service providers.

Rozenberg is the scion of a New York family that controls nursing homes and other health care businesses.

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