El Al seeks approval to raise capital as pilots object to cost-saving pact

El Al has called a shareholders’ meeting for 18 August in order to seek approval to raise the company’s registered share capital. The carrier is planning to raise $400m through a $150m share issue and a state-backed staggered $250m loan. El Al says that, in order to issue the shares, an amendment to the company’s articles of association, to hike the registered capital, is necessary. Its capital currently stands at 1b shares plus a special state share. El Al says it wants approval to increase this by 500m shares, to 1.5b. The airline says it is holding discussions with the ministry of finance on the terms and conditions for the funding, adding that the government will undertake to purchase, at the average May price, any shares not taken up by the public. If the government takes shares they will be placed with a trustee whose role and powers have yet to be decided. But El Al says the conditions for the financing scheme will include restrictions on the use of the funds, and a prohibition on dividends, until the loan is repaid. Another condition requires the airline to improve its efficiency by reaching collective agreements with personnel.<br/>