State outlines framework for El Al rescue package

Breakthrough plan would also see Israel's flag carrier, which is on verge of collapse, issue $150 million in stocks, with Treasury offering a $250 million loan and promising to buy unpurchased shares
i24NEWS|
The Finance Ministry on Sunday offered the country's beleaguered national airline El Al a combination of a government-secured loan and a major share offering to help ensure its future.
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  • The revised government proposal - which has been sent to El Al's management team - revealed that the government is willing to offer the flag carrier a $250 million loan.
    2 View gallery
    מטוסי אל על מקורקעים בנתב"ג בעקבות משבר הקורונה
    מטוסי אל על מקורקעים בנתב"ג בעקבות משבר הקורונה
    El Al planes at Ben-Gurion Airport
    In addition, El Al will issue shares with a value of $150 million and the government will commit to purchasing any that are left unsold.
    Talks have been ongoing for weeks, after the government shutdown of the Israeli economy due to the coronavirus, hit El Al particularly hard - with effectively all travel, both in and out of the country, suspended.
    In May, there were reports of a NIS 1.4 billion ($400 million) government loan for the airline, which was coupled with strict demands for the company's recovery plan.
    2 View gallery
    הפגנה של עובדי אל על מול משרד האוצר בירושלים
    הפגנה של עובדי אל על מול משרד האוצר בירושלים
    El Al employees protesting outside the Finance Ministry
    (Photo: Amit Shabi)
    Approval for the plan is far from straightforward. It will require the agreement of the airline itself, the government and the Knesset's Finance Committee.
    As in previous incarnations of the plan, it is thought likely that there will be severe cost-cutting measures, with potentially as many as one-third of El Al's 6,000-strong workforce being laid off.
    Such a move would require the approval of El Al's workers' union.
    The airline said it would evaluate the new bailout proposal.
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