Arkia Shareholders Clash Over Capital Injection Amid Financial Woes
Translated & summarized from Calcalist by baba
Arkia's majority shareholders, the Nakash brothers, are pushing for a capital injection, threatening minority shareholders, including employees, with ownership dilution if they don't contribute. Employees, who protest the move, claim the investment aims to reduce their stake and potentially facilitate a sale. The airline is facing significant financial losses, and a government grant is contingent on new investment. Employees have threatened a labor dispute and operational shutdown.
The story in 5 lines · by baba
- Arkia majority shareholders threaten employee-shareholders with dilution if they don't invest in the airline.
- Employees claim the investment aims to reduce their stake and push them out before a potential sale.
- Arkia needs significant funds to secure a government grant and avoid insolvency.
- Employees, who own about 20% of Arkia, have protested and threatened a labor dispute.
- The airline has lost over $30 million since the start of 2026 due to operational challenges.
Kanfeiim Holdings, the entity through which the Nakash brothers hold Arkia, has warned that shareholders who do not participate in a required capital infusion for the airline may face diluted ownership. This response comes amid claims by Arkia employees that the Nakash brothers' investment aims to sideline workers and reduce their shareholding.
In a letter sent by the company's legal representative, attorney Ofer Shapira, Arkia is described as urgently needing significant funds, partly to secure a government grant. Without additional investment, the airline could face insolvency. The state has reportedly conditioned an immediate grant on a matching investment from shareholders, including employees who collectively own approximately 20% of the company through their corporation, "TUT." Kanfeiim argues that further financing is contingent on equity injection, not loans.
The company claims that TUT opposes the capital injection but also refuses to participate in financing, prioritizing its stake preservation over the company's welfare. Kanfeiim warns this stance could lead to a dilution of TUT's and consequently the employees' holdings if they don't contribute. The company asserts that TUT's actions violate corporate law duties.
Kanfeiim also stated that shareholders are invited to contribute their proportional share to prevent dilution. This conflict arises against the backdrop of Arkia's challenging financial situation, having lost over $30 million since the start of 2026 due to rising fuel costs and reduced air travel from the security situation.
The Nakash brothers, who own 80% of Arkia, wish to inject more capital. However, employees, whose stake has fallen from about 30% to 20% after previous injections, oppose further dilution. They allege the Nakash brothers' objective is to push them out ahead of a potential company sale.
Employees protested outside the company's offices, vowing to declare a labor dispute and halt operations if the Nakash brothers proceed with their plans.
