As part of the outline, the state will offer airlines assistance that will be provided by way of conversion bonds into shares for a period of three years without interest. State aid will be transferred to the airlines in parallel with the transfer of share capital to the airline in an equal amount (ratio of 1: 1). The total amount of state aid to all Israeli airlines will not, in aggregate, exceed $ 44 million.
After three years, each airline will be able to choose whether to repay the bond to the state or convert the debt into shares allotted to the state at a price that reflects a discount on the share price to be determined by the state depending on the conversion date.
The conversion will be made how and only in a situation where the airline will be public and its shares will be tradable. In any case, the State’s share in the share capital of each of the companies shall not exceed 24%. As long as the state holds the shares, they will be anesthetized so that the state will not participate in the voting as a shareholder but will be entitled to the equity rights attached to the shares.
The Minister of Finance, Avigdor Lieberman: “The additional aid scheme will allow Israeli airlines to overcome the difficulties experienced by the industry in the last 20 months and strengthen their capital structure. At the same time, we kept the taxpayer’s money so that the companies would return the money to the state when the situation improved and they prospered. “
The Minister of Transportation and Road Safety, MK Merav Michaeli: “Israeli aviation is a significant strategic-national asset for the State of Israel and it has undergone severe upheavals in the past two years. In light of the importance of the Israeli aviation industry, we worked together with the Ministry of Finance to ensure a fair and balanced assistance outline that combines our responsibilities as a government with the responsibilities of the controlling shareholders in the various companies. The outline we have presented will benefit the Israeli public first and foremost and will ensure the stability of the companies and their employees. “