Arkia Employees Seek New Investor to Block Sale Deal
Translated & summarized from Globes by baba
Arkia's employees are attempting to find a new investor to submit a competing bid for the airline before a Monday deadline, aiming to protect their stake. The current deal, signed by the Nakash brothers with a group led by Kidyan Dahari and Yaron Adib, involves a $45 million capital injection but faces challenges due to Arkia's projected significant losses. The employees' union is negotiating with potential investors to secure their future and share in the company.
The story in 5 lines · by baba
- Arkia employees are seeking a new investor to submit a competing bid by Monday afternoon.
- The Nakash brothers agreed to sell their controlling stake to a group led by Kidyan Dahari and Yaron Adib.
- The proposed deal includes a $45 million capital injection but Arkia faces significant projected losses.
- Employees currently hold a 22% stake in Arkia, which they aim to protect.
- Previous potential buyers included Israir and El Al.
Arkia's employee union is racing against time to find a new investor to submit a competing bid for the airline, aiming to protect employee holdings and status. The Nakash brothers, the current controlling shareholders, recently signed a deal to sell their majority stake to a group led by Kidyan Dahari and Yaron Adib. The employees have until Monday afternoon to secure an alternative offer that not only matches the current deal but also safeguards their interests.
The union's efforts come after a tense period of conflict with the owners. Initially, the Nakash brothers proposed injecting capital in exchange for further diluting the employees' 22% stake, a move the employees opposed, having already seen their share reduced from 30%. This led to protests and a labor dispute declared by the Transport Workers Union, citing concerns over potential layoffs and line cancellations without consultation.
The sale agreement involves the acquiring group injecting $30 million into Arkia. Kidyan Dahari and Yaron Adib will contribute $15 million, Yariv Lerner $10.5 million, and Einat Adib-Berr $4.5 million. The Nakash brothers will retain a 3% stake after injecting $8.5 million, and the state will add $7.8 million, totaling a $45 million capital injection.
However, this funding is expected to be insufficient to cover Arkia's projected losses. The company is estimated to have lost around $30 million in the first three quarters of the year and anticipates ending 2026 with a deficit of $50-60 million. The upcoming winter season, typically slow for aviation, is likely to worsen the cash flow issues before the summer.
Arkia, which the Nakash brothers have owned since 2005, is facing significant financial challenges. The new owners will need to address substantial losses, secure further funding, and resolve relations with the employees. Other potential buyers, including Israir and El Al, had previously shown interest in acquiring Arkia. The coming days will determine if the employees' efforts yield a competing offer or if the deal with Dahari and Adib proceeds.
Mentioned
