El Al Israel Airlines Ltd. (TASE:ELAL) has announced the postponement of the sale of a stake in its Matmid Frequent Flyers Club, which it registered as a subsidiary last month. The airline is aiming to raise at least $100 million by selling a minority stake and as part of the aid package it agreed with the Ministry of Finance and has until March 14 to do so.
The El Al Matmid Frequent Flyers Club is one of the airline's most profitable activities and it had hoped to sell a stake by January. The airline has held talks with interested parties including Bank Hapoalim for the sale of a 30% stake at an overall valuation of $250 million for Matmid. Hapoalim had considered integrated Matmid into its Bit payment app.
The Matmid Frequent Flyers Club has 2.1 million members of whom 350,000 hold its FlyCard credit card. Annual crerdit card spending using FlyCard amounts to $30 billion, which yields annual revenue for El Al of $25-30 million.
Another way in which El Al is seeking to raise capital is by taking out loans against, or even selling flight slots. Flight slots at busy popular airports like JFK in New York and London's Heathrow at convenient hours can be worth millions of dollars. One option would be to take a $100 million loan with the flight slots as surety, although El Al is committed to receiving government approval for such a step.
As part of the aid it is receiving from the government, El Al is committed to raising $105 million in a public offering by September 2022.
Published by Globes, Israel business news - en.globes.co.il - on March 1, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.