Kenny Rosenberg, the controlling owner of El Al, on Tuesday, transferred about $50 million to his company, in keeping with the aid agreement he signed on November 22 between El Al and the state, Calcalist reported on Wednesday (צעד ראשון במתווה: רוזנברג הזרים לאל על 50 מיליון דולר). Rosenberg gave in to the Finance Ministry’s threats and signed an agreement with El Al under which he would give his company a loan of $63 million, following which the state would hand El Al a $30 million interest-free loan.
Under the agreement, Rosenberg pledged to inject an additional $13 million by February 28th. In return, the state will transfer to El Al in the coming days a loan of $7 million in the form of bonds converted into shares, and an additional $13 million after Rosenberg completes his part of the deal.
Rosenberg can also transfer an additional $10 million in exchange for an additional loan of the same amount from the state. In addition, the state will transfer an additional $20 million to El Al in the coming three days, as an advance on the payments for the security services in 2022 agreed upon under the previous aid outline.
A short while ago, Finance Ministry Director-General Ram Belinkov said Rosenberg’s behavior was questionable when the latter agreed to receive money from the state but then reneged on his commitment to infuse funds into his company. Belinkov was critical of the situation whereby the state, which is the actual owner of EL AL, pours the taxpayers’ money into the company, while should EL AL show profit someday, the state would share it with Kenny Rosenberg.
With the outbreak of the Omicron variant, the airlines in Israel, with El Al in the lead, are demanding additional compensation from the state, stressing that this time they need real compensation and not loans. According to El Al, thousands of tickets were canceled on Tuesday, bookings are slowing down, and flights are being canceled to destinations where Israelis are not allowed to enter, such as Switzerland.
Still, after all is said and done, Rosenberg has invested a tremendous amount in El Al which is yet to show signs of a robust recovery. Since taking over the company (first through his son Eli), Rosenberg has poured into Al about $211 million: around $110 million in the IPO that made him the controlling shareholder; an additional $51 million in an IPO last March; and an additional $50 million this week. Should Rosenberg realize the full agreement with the state, then he would transfer a total of about $234 million to El Al in about a year and a half.