El Al Israel Airlines Ltd. is embarking on a capital-raising endeavor amid its favorable momentum, aiming to secure hundreds of millions of shekels.
The airline, led by controlling shareholder Kenny Rozenberg, disclosed plans to procure new funds by issuing fresh shares, coinciding with its recent acquisition of three additional Dreamliners.
The infusion of approximately $100 million will bolster El Al across various fronts. Notably, it will enhance its financial standing, facilitating a transition to positive equity while positioning the company for inclusion in prominent TASE indices.
Importantly, it will aid in the repayment of owner loans extended by Rozenberg, without diluting his stake in the airline.
This upswing reflects the company’s resilience amidst the global tourism and aviation downturn triggered by the COVID-19 pandemic.
Despite initial forecasts of adversity during the conflict, El Al’s market share at Ben Gurion airport soared to 80% in late 2023, propelling it to carry more passengers at elevated fares, resulting in a net profit of $40 million in the fourth quarter.
Against this backdrop, El Al’s management, spearheaded by CEO Dina Ben Tal Ganancia, recently revealed a preliminary agreement with Boeing for the procurement of three 787-9 Dreamliners, valued at $650-730 million.
These acquisitions, slated for delivery between 2029 and 2030, represent a strategic move to expand the airline’s fleet and bolster its operational capacity.
Simultaneously, El Al’s capital-raising initiative, coupled with the Boeing deal, is poised to address short-term financial exigencies, potentially enabling the repayment of advances for the Dreamliner acquisitions.
Moreover, it presents an opportunity for Rozenberg to convert owner loans into equity, further aligning with the company’s financial objectives.
The anticipated capital infusion, alongside robust operational performance, positions El Al to achieve positive equity in 2024. Additionally, the company aims to secure a coveted spot in the Tel Aviv 125 Index, enhancing its market visibility and investor appeal.
CEO Ben Tal Ganancia emphasized the strategic significance of expanding the aircraft fleet and raising capital, reiterating the company’s commitment to its long-term growth trajectory.
The notable improvement in El Al’s financial metrics is mirrored in the substantial increase in senior executive salaries. CEO Ben Tal Ganancia and Chairman of the Board Amikam Ben Zvi witnessed significant salary increments, reflective of the company’s positive trajectory.
Additionally, Rozenberg, alongside fellow vice chairman Daryl Hagler, stands to benefit from perks, including monthly remuneration and travel allowances, underscoring El Al’s commitment to rewarding its leadership team.
