Arkia Airline Acquisition Faces Shabbat Flight Decision
Translated & summarized from Ice by baba
Haredi entrepreneur Ezra Ungar has submitted a new offer to acquire control of Arkia airline, proposing to significantly reduce the employee union's shareholding and halt flights on Shabbat. The employees have until Monday to present a better offer to another buyer group. Ungar's bid comes amid Arkia's worsening financial state, requiring a $30 million injection, but questions linger about his personal financial capacity and whether he is acting as a frontman for other investors.
The story in 6 lines · by baba
- Ezra Ungar's new offer for Arkia airline includes ending flights on Shabbat.
- The offer aims to dilute the employee union's stake in Arkia from 22% to about 3%.
- Arkia's financial situation has worsened, requiring immediate capital to continue operations.
- Another buyer group gave employees until Monday to match their acquisition terms.
- Questions exist about Ezra Ungar's financial ability to fund the deal.
- Ungar may be acting as an intermediary for other Haredi investors.
An updated offer has been submitted by New York-based Haredi entrepreneur Ezra Ungar to acquire control of the Israeli airline Arkia. The proposal targets the employee union, Tu't, which holds 22% of the company's shares, aiming to significantly dilute their stake to around 3%. To mitigate this reduction, Ungar's offer includes a seat for a union representative on the board, protection against layoffs, and a commitment to cease Arkia's flight operations on Shabbat.
The employees, led by Tu't Chairman Avi Adri, have not yet responded. However, given Arkia's tight schedule and precarious financial situation, they may be compelled to accept Ungar's terms if a better alternative isn't secured soon. This offer comes amid an ultimatum from another group of buyers, including Yariv Lerner, Kidan Dahari, Yaron Adib, and Einav Adib-Berrer, who had an agreement in principle and gave the employees until Monday to present a comparable offer.
Ungar's current proposal reflects a deterioration in Arkia's financial standing since his previous offer four months ago, which would have preserved the employees' 22% shareholding. Arkia now requires immediate capital injection to continue operating as a going concern. Ungar's advantage lies in having already completed due diligence on the company.
The deal requires Ungar to match the capital injection agreed upon by the other buyers: $30 million from Ungar, $8.5 million plus a $4.5 million debt waiver from the Nakash brothers, and an additional $7.8 million from the state.
Despite Ungar's procedural advantage, significant questions surround his financial capacity. In September, he reportedly informed New York authorities that he lacked funds to pay a $500,000 fine, stating in an affidavit that he had no real estate, sufficient assets, cash, or credit to do so. An American real estate site also reported that Ungar is not bringing his own capital but is acting as an intermediary for Haredi investors. Ungar's representatives deny these doubts, asserting that financing is arranged and that he intends to bring in additional partners.
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