El Al could begin Saturday flights
If the airline becomes a mixed company on June 6, it can fly on Saturdays, whatever the government says.
David Hayoun 12 May 04 16:45
A "Globes" investigation has found that El Al (TASE:ELAL) can begin flying on Saturdays beginning in June, if, as expected, all the airline's options holders exercise them by June 3.
In that event, as of the exercise date of June 6, the government will own only 49.5% of El Al. That means that it will become a mixed company instead of a government company. The state currently owns 81% of El Al.
Government sources stress that as of now, El Al operates as a wholly commercial company, except in certain matters, which are likely to change if its status is changed.
The most important matter is Saturday flights, which El Al has not made since 1982, when the government exercised a clause in a law to ban them. This clause only applies to government companies, which El Al has always been.
Another effect of the change in El Al's status to a mixed company is that it will directly appoint board members in its subsidiaries, without the need to get ministers' approval. That means that the ministers of finance and transport will no longer be able to appoint board members to El Al subsidiaries.
El Al's secretary and legal advisor said today that option holders have until June 3 to declare whether they will exercise their options. There are 125 million options with a strike price of NIS 1.30 per option. The official deadline for exercising the options is June 6, under the privatization format for El Al carried out last year.
The privatization format stipulates that short-term options will be exercised in June 2004 and long-term options in December. Knafaim-Arkia Holdings (TASE:KNFM) bought 4.99% of El Al shares when it was privatized last year, and it will own almost 23% of the airline when it exercises all its short-term options and acquire the 51% controlling interest in December, if it exercises its long-term options.
Knafaim-Arkia bought more El Al shares and options than any other buyer participating in the privatization.
Capital market sources say it is very worthwhile to exercise the options, since the strike price is NIS 1.30 per share, and El Al shares are currently traded at NIS 2.70.
The sources added if just two million of the 125 million options are not exercised, then the state will still own over 50% of El Al, which will then remain a government company, at least until December, when the long-term options are exercised.
If the airline becomes a mixed company on June 6, it can fly on Saturdays, whatever the government says.
David Hayoun 12 May 04 16:45
A "Globes" investigation has found that El Al (TASE:ELAL) can begin flying on Saturdays beginning in June, if, as expected, all the airline's options holders exercise them by June 3.
In that event, as of the exercise date of June 6, the government will own only 49.5% of El Al. That means that it will become a mixed company instead of a government company. The state currently owns 81% of El Al.
Government sources stress that as of now, El Al operates as a wholly commercial company, except in certain matters, which are likely to change if its status is changed.
The most important matter is Saturday flights, which El Al has not made since 1982, when the government exercised a clause in a law to ban them. This clause only applies to government companies, which El Al has always been.
Another effect of the change in El Al's status to a mixed company is that it will directly appoint board members in its subsidiaries, without the need to get ministers' approval. That means that the ministers of finance and transport will no longer be able to appoint board members to El Al subsidiaries.
El Al's secretary and legal advisor said today that option holders have until June 3 to declare whether they will exercise their options. There are 125 million options with a strike price of NIS 1.30 per option. The official deadline for exercising the options is June 6, under the privatization format for El Al carried out last year.
The privatization format stipulates that short-term options will be exercised in June 2004 and long-term options in December. Knafaim-Arkia Holdings (TASE:KNFM) bought 4.99% of El Al shares when it was privatized last year, and it will own almost 23% of the airline when it exercises all its short-term options and acquire the 51% controlling interest in December, if it exercises its long-term options.
Knafaim-Arkia bought more El Al shares and options than any other buyer participating in the privatization.
Capital market sources say it is very worthwhile to exercise the options, since the strike price is NIS 1.30 per share, and El Al shares are currently traded at NIS 2.70.
The sources added if just two million of the 125 million options are not exercised, then the state will still own over 50% of El Al, which will then remain a government company, at least until December, when the long-term options are exercised.
