New Arkia Acquisition Offer Cuts Employee Shares, Demands Sabbath Flight Halt
Translated & summarized from Calcalist by baba
Haredi entrepreneur Ezra Ungar has presented a new offer to acquire Arkia Airlines, significantly reducing the employee shareholding to about 3% and demanding an end to Sabbath flights. The current acquirers have given employees until Monday to present a competing offer. Arkia's worsening financial state necessitates immediate funding, with Ungar's proposal including a $30 million injection, though questions have been raised about his personal financial capacity and role as a mediator.
The story in 5 lines · by baba
- Ezra Ungar's new Arkia offer reduces employee shares to 3% and requires halting Sabbath flights.
- Employees have until Monday to present a competing offer to the current Arkia acquirers.
- Arkia requires immediate capital infusion due to its deteriorating financial condition.
- Ungar's offer includes a $30 million injection, but his financial role has been questioned.
- A previous, more generous offer from Ungar allowed employees to retain 22% of Arkia's shares.
New York-based Haredi entrepreneur Ezra Ungar has submitted a revised offer to acquire control of Arkia Airlines, proposing that employees retain only a minimal stake of approximately 3% in the company. The offer, presented Friday to representatives of Tu't, the employees' company holding 22% of Arkia's shares, also includes one board seat for employees and protection against layoffs and efficiency measures. A central condition of Ungar's proposal is that Arkia cease all flights on the Sabbath.
Employees, led by Tu't Chairman Avi Edri, have not yet responded to the offer. However, they may be forced to compromise if they cannot secure a better deal. The existing acquirers, Yariv Lerner, Kidyan Dahari, Yaron Adib, and Einav Adib-Berrer, have given employees until Monday to present an alternative offer under the same purchase terms, promising to step aside if the employees succeed.
Ungar, who previously conducted due diligence on Arkia, had made a more generous offer about four months ago, allowing employees to keep their full 22% share. Arkia's financial situation has since deteriorated, requiring immediate capital infusion to continue operating. Reports from September indicated Ungar claimed in New York not to have funds for a $500,000 fine, stating in an affidavit that he lacked sufficient assets or credit. His role in the Arkia deal has also been described as a mediator for other Haredi investors rather than a direct funder, though his associates assert the deal's funding is secured.
The agreement with the current acquirers involves a $30 million injection, with the Nakash brothers contributing $8.5 million and waiving a $4.5 million debt, and the state adding $7.8 million. Ungar's current proposal also includes a $30 million injection, and he is reportedly seeking additional partners. Meanwhile, employees are exploring other potential investors, though Ungar's prior due diligence provides him an advantage.
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