Investors to Inject Tens of Millions into Arkia, Acquiring Control
Translated & summarized from Ynet by baba
A group of investors has agreed to acquire control of the Israeli airline Arkia, pledging to inject tens of millions of dollars into the company. The deal was announced by the current owners, the Nakash brothers, on the same day the Transport Workers Union declared a labor dispute over proposed staff reductions and lack of progress on a sale. Employees fear the company may face insolvency due to unilateral management actions. The airline has been seeking a buyer for over 18 months, with previous deals falling through.
The story in 5 lines · by baba
- Investors will inject tens of millions of dollars into Arkia, acquiring majority control.
- The Nakash brothers, current owners, announced the agreement to sell Arkia.
- The Transport Workers Union declared a labor dispute over staff cuts and sale progress.
- Employees fear Arkia may face insolvency due to management's unilateral actions.
- Arkia has been attempting to sell for over 18 months, with previous deals failing.
A group of investors has signed an agreement to acquire control of the Israeli airline Arkia, committing to inject tens of millions of dollars into the company and become its majority shareholder. The deal was announced by the Nakash brothers, Rafi, Joe, and Avi, who have appointed Avi Hurumro, CEO of Nakash Group, to lead the company's recovery.
The acquiring group includes businesswoman Einav Adib-Berrer, who owns medical centers; Kidyan Dahari and Yaron Adib, owners of real estate companies; and Yariv Lerner, businessman and owner of Negev Group. The group stated their belief in Arkia and the Israeli aviation sector, emphasizing their long-term commitment to stabilize and strengthen the company for the benefit of its employees, passengers, and the Israeli economy.
The agreement comes on the same day the Transport Workers Union announced a labor dispute at Arkia. The dispute stems from the company's management's promotion of efficiency measures and staff reductions without consultation with employee representatives. Employees also claim the owners are not advancing a sale deal that could significantly aid the company's future.
Lerner, now part of the acquiring group, was previously mentioned in reports as part of an employee-backed investor group that had reached understandings with one of the Nakash brothers, but disagreements among the brothers reportedly stalled that effort. The union alleges that the company's management is unilaterally implementing measures impacting employees' job security, working conditions, and rights, including route cancellations, and raises concerns about the company heading towards insolvency.
Arkia has been on the market for over 18 months, with previous potential deals, including one with Orthodox investor Ezra Ungar and businessman Eliot Zamel, failing to materialize. The Nakash brothers have stated their intention to sell the airline, citing no succession plan. Arkia's losses are estimated at around $30 million this year, with projections of $30 to $40 million in losses by year-end.
Nir Eisenberg, Deputy Chairman of the Transport Workers Union, stated that if the Nakash brothers no longer wish to own Arkia, it is time to complete the sale and transfer the company to owners who believe in its future. He stressed that employees should not be held hostage by ownership struggles and that the union will not allow Arkia's employees to become bargaining chips.
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