EI AI Isreal Airlines is set to be nationalised after accepting a bailout plan from the government. The cash trapped Israeli flag carrier agreed to the plan from the ministry of finance, that it will receive a 75% guarantee from the state for a $250 million loan and hold a $150 million offering on the Telaviv stock exchange (TASE).
The Israeli carrier and it’s shareholder Knatain Holdings have been in discussion with the Israel minister of finance for bailout, as they faced a significant financial crisis due to the lack of travel demand caused by the coronavirus pandemic.
According to a report, any shares that are not yet purchased by the public, will be bought by the government, then if after all the shares have been purchased and the state has a controlling stake, they will appoint a trustee to the company for a period of three years.
While the plan has been approved by the airline’s board of directors, different unions associated with working groups within the airline will also have to sign off on the deal, which includes significant cost-cutting measures. These measures include cutting nearly a third of the airline’s employees. The bailout is also subject to parliamentary approval.
Additional information from airlinegeeks.com