El Al prepares to embark on crucial funding exercise

El Al has outlined its operational position to potential investors ahead of publishing a formal offer to acquire shares in the Israeli airline as part of a 505m shekel ($145m) issue. The airline is planning to commence the offering on 16 September, part of a recapitalisation which will separately include a $250m state-backed loan. El Al’s passenger flight operations, halted in March, remain suspended and the carrier says a timeframe for resuming regular and significant activity is “difficult to estimate”. While the share issue is being finalised, the airline says that there is no agreement yet over raising the loan, and no certainty that it will be obtained. It points out that, under amended legislation on flight refunds, repayments to passengers affected by cancellations need to be made by 1 October. “If the company fails to raise the [loan] or a significant portion of it by 1 October – and if this date is not extended – it will not be able to pay back the full amount of the refund to customers,” it adds.<br/>