Commodities

Control of Israel's El Al Airlines bought by 27-year-old student

Credit: REUTERS/ERIC GAILLARD

A 27-year-old U.S.-born yeshiva student has secured control of El Al Israel Airlines following a public share offering that was a government condition for the carrier to receive a 75% state-backed $250 million loan.

By Steven Scheer

JERUSALEM, Sept 17 (Reuters) - A 27-year-old U.S.-born yeshiva student has secured control of El Al Israel Airlines ELAL.TA following a public share offering that was a government condition for the carrier to receive a 75% state-backed $250 million loan.

Eli Rozenberg's newly created Kanfei Nesharim Aviation bought $107 million of shares that would give him a nearly 43% stake in Israel's flag carrier, his spokesman said Thursday.

Rozenberg, who resides in Israel, is the son of Kenny Rozenberg, chief executive of New York-based nursing home chain Centers Health Care.

The government bought a 15% stake for $34 million while the holdings of El Al's current owners, Knafaim Holdings KNFM.TA, fell to 15.2% from 38%.

Rozenberg in July had offered to funnel $75 million into the airline in return for a 44.99% stake.

The deal needs approval from parliament's finance committee.

Kanfei Nesharim's spokesman said Rozenberg will meet Finance Ministry officials next week.

He said once Rozenberg is approved, he will seek to make changes to El Al's board and elsewhere to move the cash-strapped carrier forward. Kanfei Nesharim said it would invest heavily in improving El Al's service and to upgrade its food service.

Rozenberg has surrounded himself with advisers including Jason Greenblatt, a former adviser to President Donald Trump.

El Al suspended scheduled passenger flights in March at the outset of the coronavirus outbreak when Israel closed its borders to foreign citizens.

Earlier on Thursday, it said it would resume flights to Athens on Oct. 1, followed by daily flights to New York, London and Paris starting Oct. 12.

The airline has reported losses for two years and racked up debt to renew its fleet. In addition to the share offering, the government has required El Al to slash costs.

Most of its 5,940 employees remain on unpaid leave and El Al said it would gradually bring a small number back.

(Reporting by Steven Scheer; Editing by Bernadette Baum)

((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters Messaging: steven.scheer.thomsonreuters.com@reuters.net; Twitter: @StevenMScheer))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

US Markets

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More