MIAMI – A 27-year-old student Eli Rozenberg has bought a 42,85%, controlling share in Israel’s national airline, El Al (LY). Eli is the son of US businessman Kenny Rozenberg and was the only bidder out of the three potential buyers.
COVID-19 pandemic hit El Al hard. The carrier suspended all flights, became embroiled in a dispute with unions, and ordered all planes back to Israel. In addition, it had to apply for state aid and decided to sell shares.
The Rozenberg family had been interested in buying El Al since July. According to Israeli Calcalist, the family has no experience in the aviation industry. According to the news outlet, the family’s rabbi instructed them to buy the struggling airline.
On Wednesday, Eli placed the only bid at the Tel Aviv Stock Exchange. He acquired a 42,85% share in the airline through company Kanfei Nesharim Aviation, totaling US$107m. The Government of Israel also bought a 15% stake for US$34m.
The deal is not yet finalized, as it needs the approval of the Finance Ministry. A spokesperson said that Rozenberg will meet officials next week.
The other two potential bidders have not made their bids. David Sapir, a Russian-Israeli businessman focused in tourism, and Meir Gurvitz, a British-Israeli real estate specialist decided to stay away from bidding.
The Work ahead
El Al has recorded huge losses in the previous years, going into debt to renew its fleet. The Israeli Finance Ministry has also worked out a US$400m rescue package. This includes loans up to US$250m, with the rest comprised of the share sales.
Kanfei Nesharim’s spokesperson has expressed goals to improve the airline’s food offering and punctuality. It is arguable whether these are the most important things to improve for an airline battling for survival. The spokesperson has also said that once the deal is finalized, the new owners will make changes to LY’s board.
“Kanfei Nesharim takes upon itself a great responsibility to restore the trust of passengers, and to ensure the jobs of thousands of El Al employees, and lead Israel’s airline into a secure future. Throughout recent months, Kanfei Nesharim has proven its seriousness, commitment, and financial ability to help rehabilitate El Al,” the carrier said.
Featured image: El Al Boeing 777-200ER Taking Off from Milan Malpensa Intl’ Airport (MXP). Photo: Andrea Ongaro @alphaoscaraviation