Nakash Brothers Inject Funds to Finalize Arkia Airline Sale

By הדסה בלומרט

Translated & summarized from Ice by baba

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Hebrew · 5 newsrooms covering

The Nakash brothers, current owners of Arkia airline, have agreed to inject $8.5 million into the company as part of a deal to sell control. The new ownership group, including Kidan Dahari, Yaron Adib, Yariv Lerner, and Einav Adib-Berrer, will inject $30 million, with the Ministry of Finance adding $7.8 million. The deal requires approval from Arkia's employees, who hold 22% of the shares and are currently in a labor dispute.

The story in 5 lines · by baba

Nakash brothers will inject $8.5 million into Arkia as part of a control sale agreement.
New buyers Kidan Dahari, Yaron Adib, Yariv Lerner, and Einav Adib-Berrer will invest $30 million.
The Ministry of Finance will contribute an additional $7.8 million to Arkia.
The Nakash brothers will retain a 3% stake in Arkia for tax and regulatory reasons.
Arkia's employees, holding 22% of shares, must approve the deal to maintain their stake.

Nakash Brothers Inject Funds to Finalize Arkia Airline Sale — Editorial illustration generated by baba News, not a photograph of the event.

The protracted saga of Israeli airline Arkia, marked by a fierce control battle, deepening financial deficit, and an uncertain future, has concluded with the signing of a control acquisition agreement. The deal is expected to inject approximately $45 million into the company's coffers, the minimum capital required for its continued operation and recovery.

The agreement details reveal a complex structure involving last-minute compromises and an ongoing struggle with the workers' union. The new ownership group has committed to injecting $30 million. The current owners, the Nakash brothers Rafi, Joe, and Avi, surprisingly agreed to contribute $8.5 million themselves to bridge the gap to the required $45 million. This move unlocked further government support, with the Ministry of Finance set to provide an additional $7.8 million, contingent on the Nakash brothers' investment.

Interestingly, the Nakash brothers will retain a symbolic 3% stake in Arkia, reportedly for tax and regulatory reasons related to their business activities in the United States. The final ownership structure of the acquiring group involves Kidan Dahari and Yaron Adib holding 50%, Yariv Lerner with 35%, and Einav Adib-Berrer, Yaron Adib's sister, acquiring 15% from Lerner's share.

This deal faces a significant hurdle with Arkia's employees, who hold 22% of the company's shares. They can maintain their stake only by contributing their proportional share of the deal, a scenario that appears challenging, especially as the entire transaction still requires their approval. The employees are in a difficult position: they can obstruct the deal by declaring a labor dispute, but their preferred investors, the Varor and Alkayem families, lack the capital and expertise of Lerner, who has now joined forces with Dahari and Adib. Intense negotiations are anticipated as any future buyer will need the employees' cooperation to operate the airline.