Arkia workers oppose merger with El Al: “The procedure was done by snatch”

Arkia workers oppose merger with El Al: “The procedure was done by snatch”
Arkia workers oppose merger with El Al: “The procedure was done by snatch”

This week, El Al announced in a statement to the stock exchange that talks are underway to merge Arkia into the company, in exchange for the allotment of El Al shares to Arkia owners. 70% of Arkia owns the Nakash brothers’ Jordash company, and the remaining 30% is owned by the company’s employees (in an organization known as Tut, Tourism and Aviation).

The employees’ claim, as expressed in a letter sent to the company’s management on behalf of their power of attorney, is that in order to negotiate the sale of the company, a 75% majority is required, while there is no such majority since the employees are unionized and oppose the apparent deal.

For them, by the way, a “logical” merger was supposed to take place with Israir And not with El Al. Prior to the transfer of ownership of Israir and the transfer of control to Rami Levy, a dialogue took place to merge the companies, but now it is not on the agenda.

“For some time now, the controlling owner, Nakash Group, has been working through its representatives in Arkia Kavi to allow the dilution of TOT holdings in the company, while violating TOT’s rights, all with the aim of enabling transactions in the company’s capital, the current one of which is the merger with EL AL.” This is stated in a letter sent to the company’s management on behalf of the power of Arkia employees, who claim that despite the 75% mandatory provision for mergers or reorganizations, a dialogue was held “over the heads” of the employees.

It was alleged that the management even delayed for many months the publication of the company’s financial statements “contrary to the company’s benefit” in order to dilute the holdings of the company’s employees by injecting capital from the controlling shareholders, according to them – for merger with El Al.

It should be noted that unlike El Al and Israir, which received an advance from the state worth $ 210 million and $ 16 million, respectively (in favor of future flight tickets for the flight security system), Arkia has not yet received a similar advance. The company had a dispute with the state over the Sde Dov issue.

The dispute has come to an end but an advance has not yet been transferred to the company. “In return” for the aforesaid advance, the controlling shareholders undertook to inject half of the capital received on their behalf, whether in an IPO or injecting capital. El Al was supposed to raise $ 105 million as part of an IPO in which the owner undertook to purchase shares in the amount of $ 43 million, this IPO intended for the end of July has not yet been carried out. Israir, for its part, has pledged $ 8 million in shareholder equity by the end of October.

In a letter sent on behalf of Arkia employees, they mention the capital injection from the controlling shareholder in order to receive assistance from the state, “but the way to make this transfer should be done by providing a loan. This alternative will also benefit the controlling shareholder, who will be entitled to a loan repayment.” It was further argued that the controlling shareholder must repay debts to Arkia “whose due date has long since arrived.”

As for the merger in question with El Al, what worries the employees is that not only will their maintenance be diluted but many will be forced to leave. As stated, it was argued that the merger promotion on behalf of the management was done “without authority and even without the required discussion and approval of the board of directors, and in clear violation of the obligations in the memorandum of understanding. And / or a merger in violation of the provisions of the Memorandum of Understanding. “

Prof. Yaron Zelicha, chairman of TOT, stated: “There is no response.” Markie has not yet commented.

 
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