The near-bankrupt Israeli airline El Al is opposing a life-saving takeover by a 27-year-old yeshiva student who won control of the carrier last week when he bought $107 million in shares in the embattled airline. Lawyers representing El Al, however, claim Eli Rozenberg, who was born in New York but as dual Israeli citizenship and lives in Jerusalem is simply a front man for his multi-millionaire father.
Through his newly created holding company Kanfei Nesharim Aviation, Rozenberg acquired a 43 per cent controlling stake in El Al at a share offering at the Tel Aviv stock exchange last Wednesday. Rozenberg was the only bidder.
But El Al claims the real mastermind behind the takeover is Rozenberg’s father, multi-millionaire nursing home tycoon Kenny Rozenberg. He lives in New York City and does not possess Israeli citizenship.
“According to the laws and terms of El Al, buying a controlling stake by a foreigner is forbidden,” a letter sent by the airline’s lawyers to Israel’s finance minister read. First sighted by Reuters, the letter says control by an American citizen could cause problems in gaining flying rights to certain unspecified countries.
A 75 per cent government-funded $250 million loan to help save El Al from liquidation was contingent on the share offering going ahead. During the sale, the Israeli government also acquired a 15 per cent stake in the airline worth $34 million as part of a rescue package for the debt-laden carrier.
Rozenberg said his new company would make sweeping changes to the airline to return it to profitability with the young owner making it clear that he would shake up the airline’s board.
El Al has been largely grounded throughout the Corona crisis but plans to restart limited operations next month to Athens, New York, London, and Paris. Those plans, however, could be under jeopardy after the Israeli government approved a strict lockdown to counter a surge in new COVID-19 cases across the country.
