Gov't Cos Authority recommends El Al share issue next month - total privatization of El Al

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Gov't Cos Authority recommends El Al share issue next month

The recommendation will probably include a financing round by the airline, an offer for sale by the state, options and sale options.

Shai Shalev 24 Apr 03 17:41

Sources inform “Globes” that the Government Companies Authority is expected to propose that the ministerial privatization committee approve the total privatization of El Al through the Tel Aviv Stock Exchange (TASE), without a preliminary sale of 49% of the company. The decision was made at a recent meeting between the Government Companies Authority and potential investors. The authority and the issue underwriters learned that the investors did not wish to have the government as a partner, after the company shares are issued on the exchange. Leaving a golden share in the company in state hands will be sufficient to preserve essential state interests.

The parties leading the privatization believe that selling 100% of El Al, without a preliminary stage, will also attract strategic aviation and tourism investors, in addition to financial investors, such as provident and pension funds. The strategic investors will be interested in directing company activity, and in appointing company directors.

If the ministerial privatization committee accepts the recommendations of the Government Companies Authority, headed by director Eyal Gabbai, it will mark the first time that a controlling interest in a company undergoing privatization will be made available through the TASE. Among other things, any party trying to takeover El Al will have to take the state’s golden share into account. The golden share is designed to guarantee transportation of passengers and cargo in an emergency. The Government Companies Authority will discuss the privileges accorded by the golden share at a meeting early next week.

The issue of El Al shares is scheduled for late May.