Investors to Inject $30 Million into Arkia Airline, Acquire Control

By נווית זומר

Translated & summarized from Ynet by baba

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Hebrew · 11 newsrooms covering

A group of investors, including Einav Adib-Berrer, Yaron Adib, Kidan Dahari, and Yariv Lerner, has agreed to acquire control of Arkia airline, injecting $30 million and taking over most shares. The deal, announced by the Nakash brothers who previously owned the airline, involves a total of $46 million in new capital. This comes amid a labor dispute declared by Arkia's employees over proposed staff reductions and lack of consultation.

The story in 6 lines · by baba

Investors will inject $30 million into Arkia airline and acquire majority control.
The Nakash brothers are selling their controlling stake in Arkia to a new investor group.
The deal includes a total capital injection of $46 million upon closing.
Arkia's employees have declared a labor dispute over proposed staff reductions.
Yariv Lerner will manage and rehabilitate the struggling airline.
The new ownership structure will see Kidan Dahari and Yaron Adib holding 50% of shares.

Investors to Inject $30 Million into Arkia Airline, Acquire Control — Editorial illustration generated by baba News, not a photograph of the event.

A group of investors has signed an agreement to acquire control of the Israeli airline Arkia, committing to inject $30 million into the company and take over the majority of its shares. The deal was announced by the Nakash brothers, Rafi, Joe, and Avi, who have led the airline. Avi Hurumro, CEO of the Nakash Group, spearheaded the acquisition for the brothers and has been tasked with leading Arkia's recovery.

The acquiring group includes businesswoman Einav Adib-Berrer, who owns medical centers like TLV Medical Center; her brother Yaron Adib; real estate magnates Kidan Dahari and Yaron Adib, owners of "Ishpro" and "Tanoport"; and Yariv Lerner, chairman and co-owner of the "Negev Group" (Negev Ceramics), along with Viola Credit fund.

"We believe in Arkia and the Israeli aviation sector," stated the acquiring group. "Arkia is a veteran brand with a professional and dedicated staff, and we are entering the company with long-term commitment. Our investment aims to stabilize the company, strengthen its operations, and ensure its continued activity for the benefit of its employees, passengers, and the Israeli economy."

The transaction outlines a total injection of $46 million upon closing, with the investors contributing $30 million. The Nakash brothers will inject $8.5 million, and the state will provide an additional $7.5 million in compensation related to recent tensions with Iran, contingent on the Nakash brothers' investment. Arkia's existing cash reserves of $20 million will also be added. Employees holding approximately 20% of the company's shares will be offered compensation through a profit-contingent mechanism.

Following the deal, Kidan Dahari and Yaron Adib will hold 50% of the shares, Einav Adib-Berrer will hold 15%, Yariv Lerner will hold 32%, and the Nakash brothers will retain 3%. Yariv Lerner is slated to manage and rehabilitate the company.

The announcement comes as the Transport Workers Union declared a labor dispute at Arkia, citing efficiency measures and staff reductions implemented without consultation. The union also claims the owners are not advancing a sale deal that could significantly aid the company's future. The union stated that negotiations with potential buyers are underway following the dispute announcement. Previously, reports indicated that Lerner was part of an investor group formed by Arkia employees, though disagreements among the Nakash brothers reportedly stalled progress.

Arkia has been on the market for over 18 months. Previous negotiations with American investor Ezra Unger did not materialize, partly due to his demand for the company to cease operations on Shabbat. Businessman Eliot Zamel claimed a binding agreement was signed for approximately $140 million, but the Nakash brothers denied this, stating the agreement had expired. The Nakash brothers had previously indicated they were selling Arkia as there was no succession plan within the family.