Arkia Airline Changes Hands in $45 Million Investor Deal Amid Financial Woes
Translated & summarized from Calcalist by baba
Arkia Airlines is being sold by the Nakash brothers to an investor group led by Yariv Lerner for $45 million, ending 21 years of Nakash family control. The airline has faced significant financial difficulties, including over $30 million in losses this year. A major hurdle is reaching an agreement with employees, who hold 20% of the shares and are seeking to retain their rights, making the deal contingent on their approval.
The story in 5 lines · by baba
- Arkia Airlines is sold by the Nakash brothers to an investor group led by Yariv Lerner for $45 million.
- The new investors will inject $45 million to stabilize Arkia, which has reported over $30 million in losses.
- Employee approval is a condition for the deal, as they hold 20% of Arkia's shares.
- The Nakash brothers will retain a 3% minority stake in the airline.
- The deal marks the end of 21 years of Nakash family ownership of Arkia.
After 21 years, Arkia Airlines is changing ownership. The Nakash brothers, Rafi, Joe, and Avi, have signed an agreement to sell their controlling stake in the airline to an investor group led by Yariv Lerner. The group will inject $45 million into the company, making them the new controlling shareholders. This marks the end of the Nakash family's era, during which the airline faced significant financial distress and management challenges.
The Nakash brothers will retain a minority stake of approximately 3% in Arkia. The acquiring group includes four businessmen: Yariv Lerner, chairman and co-owner of the home design firm Negev Group; Kidyan Dahari and Yaron Adib, owners of real estate companies Yesepro and Tanoport; and Einav Adib-Berrer, Dahari's sister and owner of medical centers, including TLV Medical Center. Avi Khormro, CEO of Nakash Group, who was leading Arkia's recovery efforts, facilitated the deal for the Nakash family.
The $45 million injection is intended to bolster the company's capital, address cash flow pressures, and ensure continued operations. However, the exact details of the deal structure and ownership percentages are still being finalized. A key point of contention remains the status of Arkia's employees, who collectively hold about 20% of the company's shares through the "TUT" corporation. It is unclear how the deal will affect their stake, and employees are reportedly seeking alternative investors, including Ezra Unger, a New York-based businessman previously opposed by employees due to concerns about potential flight cancellations on Shabbat.
Negotiations are ongoing between the buyers and the employees. The buyers have offered employees compensation in the form of future profit sharing and options in a potential future IPO, proportional to their current holdings. However, employees are resisting this, seeking to retain their veto rights as outlined in the shareholder agreement with the Nakash family, though the validity of these rights in the current deal structure is uncertain. The agreement with the employees is a condition precedent for the buyers, meaning the deal could be canceled if no consensus is reached.
Arkia has been in a precarious financial state, reporting losses exceeding $30 million since the beginning of 2026, a capital deficit, and liquidity issues. The total funding package of approximately $45 million includes $30 million from the new buyers, $8.5 million from the Nakash brothers, and $7.8 million from the Ministry of Finance, fulfilling a prior commitment contingent on the Nakash family's capital contribution. The buyers limited their investment to $30 million, anticipating further capital needs.
The deal's success is crucial for the Israeli aviation market, which relies on Arkia, El Al, and Israir for competition, especially when foreign airlines reduce operations. If Arkia stabilizes financially and expands, it could increase flight options and lower prices. Conversely, a focus on cost-cutting could diminish its market presence. The Nakash Group stated that the deal involves a new share allocation, diluting existing shareholders to about 3% for the Nakash group, and that the buyers believe in the company's potential and its employees.
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