El Al Israel Airlines announced Wednesday evening that it has raised $77 million (NIS 250 million) – $2 million more than required to qualify for an essential government loan – by issuing 1.25 billion options to the public on the Tel Aviv Stock Exchange (TASE).
The achievement means the airline has now qualified to receive $300 million in a government loan with an 82.5 percent guarantee from the state, part of an agreement to help with its financial recovery plan.
Owner and controlling shareholder Eli Rozenberg made a commitment to buy at least $50 million of the options, and has already fulfilled his commitment, according to Globes, quoting the airline.
El Al CEO Avigal Sorek likewise committed to purchase part of the offering, an amount equal to his salary for the next six months – a promise he made to investors in a zoom call, Globes reported.
El Al offered investors between 750 million to 1.25 billion options for four years at NIS 0.30 per share in an auction with a minimum price of NIS 0.20. They were quickly snapped up, however, at a price of at least NIS 0.50, and oversubscribed with demand for 1.67 billion options – but the airline chose to limit the maximum to 1.25 billion options.
Prior to the auction the share price for El Al was NIS 0.65. Trading ended the day with the airline’s share price at NIS 0.59. It’s expected the government loan will be transferred to the airline by Pesach.