CalcalistEconomy18:24

Arkia Deal Secures $45 Million Injection From Buyers, Nakash Brothers, and State

By גולן חזני, חופית כהן אולאי

Translated & summarized from Calcalist by baba

BusinessNeutral tone

Hebrew · 7 newsrooms covering

A deal to acquire Arkia airline has been finalized, injecting $45 million from buyers ($30 million), the Nakash brothers ($8.5 million), and the Ministry of Finance ($7.8 million). The Nakash brothers will retain a 3% stake. The deal requires employee approval, who are in a difficult position as their alternative buyers needed the main investor's capital. Intensive negotiations are expected to secure employee cooperation.

The story in 6 lines · by baba

Arkia airline acquisition finalized with $45 million injection from buyers, Nakash brothers, and state.
Buyers committed $30 million, Nakash brothers $8.5 million, and Ministry of Finance $7.8 million.
The Nakash brothers will retain a 3% stake in Arkia for regulatory and tax reasons.
Einat Adib Barrer joins the deal, reducing Yariv Lerner's stake to 35% and securing 15% for herself.
The deal requires employee approval, who have limited alternative buyers without Yariv Lerner's involvement.
Intensive negotiations are anticipated to secure the necessary cooperation from Arkia's employees.

Arkia Deal Secures $45 Million Injection From Buyers, Nakash Brothers, and State — Editorial illustration generated by baba News, not a photograph of the event.

A deal to acquire the Israeli airline Arkia has been finalized, injecting a total of $45 million into the company. The primary buyers have committed to injecting $30 million, while surprisingly, the Nakash brothers will also contribute $8.5 million. The Ministry of Finance will provide $7.8 million, fulfilling a prior commitment that was contingent on the Nakash brothers' investment. The buyers were reportedly unwilling to commit more than $30 million, anticipating future capital needs, and the Nakash brothers agreed to their sum to reach the $45 million required for the airline's continued operation.

Negotiations over several days were led by Kidan Dahari and Yaron Adib, representing the main buyers, and Avi Khormro, representing the Nakash brothers. Yariv Lerner, who had initially pursued a separate deal with the Varur family and Avi Elkiaim focused on employee interests, ultimately joined forces with Dahari and Adib. This partnership was formed based on the perceived greater certainty of the deal's success under this structure.

Under the agreement, Lerner was initially set to hold 50% of the stake, with Dahari and Adib holding the other 50%. However, Einat Adib Barrer, Adib's sister and co-owner of TLV Hospital with her husband, joined the deal at the last minute. She will acquire approximately 15% of the shares, taken from Lerner's portion, reducing his stake to 35%. Dahari and Adib, owners of Tanport, will hold 50% of the shares, with their ownership not including the 22% stake allocated to employees.

Employees can retain their shares if they contribute their proportional share of the investment. However, the deal still requires employee approval. The employees find themselves in a difficult position, as the alternative buyers they had brought, Varur and Elkiaim, relied on Lerner's expertise and capital. Without Lerner's involvement, they lack a viable alternative buyer. The employees could potentially obstruct the deal, and intensive negotiations are expected to secure their cooperation, as all buyers will need their support.