Rafael Chairman Calls for Public Listing to Compete with Global Defense Firms on Talent and Funding
Professor Yuval Steinitz, chairman of Rafael Advanced Defense Systems since 2023, emphasized the urgent need for the Israeli defense company to become publicly traded to remain competitive. In an interview with Globes' podcast "Market Forces," Steinitz explained that Rafael faces fierce competition for top scientists and engineers from large international firms offering salaries up to 200,000 shekels, far exceeding what Rafael can provide as a government-owned entity. He warned that without the ability to offer equity-based compensation and higher pay, Rafael risks losing its highly skilled workforce.
Steinitz highlighted Rafael's unique global standing, noting it employs over 11,000 workers in Israel, including more than 600 PhDs and professors, and has won 65 Israeli defense awards, more than any other defense company. Despite this, Rafael struggles with a government debt of approximately 6.5 to 7 billion shekels, which hampers its financial flexibility. The company continues to supply critical defense systems to the Israel Defense Forces amid a multi-front war and growing global defense budgets.
Steinitz also discussed Rafael's expanding international contracts, including a 317 million euro sale of the "David's Sling" system to Finland and a 2 billion euro deal for the "Spider" system to Romania. He criticized French President Emmanuel Macron for what he described as discriminatory actions against Israeli defense firms at European arms exhibitions, accusing Macron of opportunism and antisemitism.
Regarding the future, Steinitz stressed that partial privatization through a public offering is essential. He noted support from Prime Minister Benjamin Netanyahu and relevant ministries, though some opposition remains within the Finance Ministry. He suggested that a U.S. Nasdaq listing could value Rafael at $100-200 billion, while an Israeli listing might yield about half that. Steinitz also addressed changes to the U.S. military aid agreement with Israel, supporting a shift toward broader cooperation rather than direct financial aid.
In conclusion, Steinitz warned that without privatization, Rafael's ability to maintain its technological leadership and workforce is at serious risk, potentially leading to the company's decline. He called for swift government action to enable Rafael's transformation into a publicly traded company with a government controlling stake but greater operational and financial flexibility.
