Arkia Assures Operations Continue Amidst Financial Woes and Sale Talks
Translated & summarized from Calcalist by baba
Arkia Airlines stated its operations are proceeding normally despite financial difficulties and potential sale talks. The airline's controlling owners, the Nakash Group, are reportedly seeking to sell the company and have approached Israir. Meanwhile, a dispute persists between Arkia's owners and employees over a necessary capital injection, with employees opposing further share dilution.
The story in 5 lines · by baba
- Arkia Airlines stated its operations are continuing as normal amid financial challenges.
- The Nakash Group, Arkia's owner, is exploring a sale and has approached Israir.
- Arkia has reportedly lost over $30 million since the start of the year.
- A dispute is ongoing between Arkia's owners and employees over capital injection.
- Employees, holding 20% of shares, oppose further dilution of their stake.
Arkia Airlines announced on Thursday that its operations are continuing as normal, despite recent reports concerning its financial situation, a dispute between its controlling shareholders and employees, and a potential sale of the company. The airline's management stated that its daily operations remain unchanged and that it continues to operate flights and meet its commitments to customers. Arkia's management added that it is adapting to the changing market realities, working to maintain operational stability, and pursuing the development of its business activities. The company emphasized that its passengers, customers, and employees are its top priority, along with the continuation of regular and uninterrupted service.
The announcement did not directly address the reported losses, the ongoing discussions about selling the company, or the conflict over diluting employee shareholdings. Earlier reports indicated that the Nakash Group, Arkia's controlling owner, had approached Israir, controlled by Rami Levy, to explore a potential acquisition. This comes after Arkia reportedly incurred losses exceeding $30 million since the beginning of the year. Israir confirmed receiving the inquiry but cautioned that the review might not lead to a deal. The Nakash brothers have appointed Avi Hurumro, the group's CEO, to manage the potential sale process.
Simultaneously, a dispute is ongoing between Arkia's owners and its employees regarding capital injection into the company. Employees, who hold approximately 20% of Arkia's shares through the "TUT" corporation after their stake was previously diluted from around 30%, oppose further dilution. The controlling shareholders argue that an urgent capital infusion is necessary to cover losses and prevent insolvency. The Transport and Sea Ports Workers Union has threatened organizational actions and declared a labor dispute, accusing management of pushing for efficiency and staff reductions without consulting employee representatives. The owners, in turn, warned that shareholders who do not participate in the capital injection risk further dilution and invited employees to invest proportionally.
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