Phoenix to extend $130m loan to El Al

El Al is in advanced talks with Israel Phoenix Assurance to receive a $130m loan. Details of the loan have already been sent to the Ministry of Finance for approval. Interest on the loan will be between 7% and 8%, which will reflect effective interest of more than 12% when taking into account the risks in the deal and the business environment in which the airline is operating and the repercussions of the Covid pandemic. As part of the agreement, Phoenix can convert the loan within five years into a minority stake in El Al's Matmid Frequent Flyers Club, which is being put up as a guarantee for the loan. El Al had previously reported that it would sell part of its frequently flyers club in order to raise at least $100 million. The deadline for realizing its stake in the frequent flyers club was extended to March 14 by the Ministry of Finance, as part of the terms of its rescue package. El Al had previously been in talks to sell a stake in the frequent flyers club to Bank Hapoalim. El Al hopes to sign a memorandum of understanding with Phoenix next week but this is a complex deal that will require due diligence, so that it will take weeks and perhaps months before El Al receives the loan.<br/>