Israeli flag-carrier El Al has put forward amendments to a proposed funding mechanism for the troubled airline, but insists the government has not rejected its basic propositions.
El Al had been trying to negotiate a $400 million loan while the finance ministry had countered with an alternative, through which the airline would take a reduced loan of $250 million and raise the remaining capital through a share offer.
The ministry had proposed that the government buy any outstanding shares not taken up by investors – a measure which potentially could have given it a 60% share of El Al, effectively returning it to state ownership.
El Al says the ministry has “not announced the rejection” of its proposals, but the airline put forward suggestions on 18 June for “adjustments”, it says, in order to “address difficulties” which El Al sees in the ministry’s idea for a combined loan and share package.
It adds that it plans to “continue discussions” with the ministry on the matter.
While El Al has not specified the nature of the adjustments, Israeli publication Globes says the airline is concerned over the time needed to arrange a share issue and the effects on its private shareholders’ stakes, and is seeking a different form of financing.
El Al has extended its suspension of passenger flights until 31 July, and similarly extended the lay-off scheme affecting its 5,800 employees.
