U.S. businessman Rozenberg gets nod to control Israel’s El Al

10:21 am Wednesday, May 19th, 2021

By Steven Scheer

JERUSALEM (Reuters) – Israel’s government on Wednesday gave permission for businessman Kenny Rozenberg to join his son in controlling flag carrier El Al Israel Airlines.

Rozenberg, the chief executive of New York-based nursing home chain Centers Health Care who recently became an Israeli citizen, will be eligible to join the airline’s board.

Last October, Israel’s privatisation body granted control of cash strapped El Al to his son, 28-year-old religious student Eli Rozenberg.

At the time, Rozenberg’s purchase of a controlling stake — through the newly created Kanfei Nesharim Aviation — was opposed by the board of El Al, which alleged he was a frontman for his non-Israeli father who financed the deal.

“We invested in El Al for Zionist motives, but we also believe in its business success,” Kenny Rozenberg said. “We will do everything necessary for the company to embark on a path of growth and success.”

Earlier this month, the government approved a bailout package for El Al that has the state covering $210 million of company security costs.

The aid depends on the issue of $105 million in new shares, which the carrier has said it would do by July, as well as slashing jobs and other costs.

El Al’s loss swelled to $531 million in 2020 from $60 million in 2019 due to the COVID-19 pandemic.

The airline, which also has a new board and management, has reported losses for three years and racked up debt to renew its fleet. It suspended scheduled passenger flights last March at the outset of the health crisis when Israel closed its borders to most foreign citizens, compounding its financial woes.

Israel has begun to open up international routes to its citizens and some tourists will be allowed to enter starting next week.

El Al is currently one of just a handful of carriers flying to and from Israel after many foreign airlines suspended flights due to the latest fighting between Israel and Hamas militants in Gaza.

“In these difficult times for the people and the state, El Al once again proves that it is … Israel’s national leader, in peace time and during critical times,” Rozenberg said.

($1 = 3.2635 shekels)

(Reporting by Steven Scheer; Editing by Kirsten Donovan)