Israel to privatize El Al on June 10

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Israel to privatize El Al on June 10

JERUSALEM (Reuters) =97 The Israeli Finance Ministry said on Sunday it plans=
=20
to sell its stake in El Al Israel Airlines at a company value of $113=20
million on June 10. The much-talked-about and long-delayed flotation of the=
=20
national carrier on the Tel Aviv Stock Exchange received the go ahead after=
=20
a Tel Aviv court rejected a petition from El Al employees on Friday. A=20
ministry spokeswoman said the government will sell its 97% stake by issuing=
=20
stock and options, which will take time to be exercised. For the next 18=20
months, the state and El Al employees will keep 50.00001% of the airline's=
=20
shares. "We are selling the whole thing right now but there will be options=
=20
so it will take time until the public owns 100%," said a spokeswoman for=20
the Government Companies Authority (GCA), the agency in charge of=20
privatization. She noted that employees will be able to buy 10 to 15% of=20
the airline.

Eyal Gabbay, head of the GCA, has already left Israel to encourage=20
institutional investors to buy into the carrier, which has some $900=20
million in debt. El Al, which Israeli newspapers, citing underwriters,=20
value at as much as $80 million, posted a net loss of $23.7 million in 2002=
=20
and a loss of $85.2 million in 2001. It recorded a loss of $33.5 million in=
=20
the first quarter due to low demand during the Iraq war. El Al has=20
struggled financially, largely due to a steep drop in tourism to Israel=20
during the past 32 months of bloody conflict with the Palestinians, but the=
=20
airline is regarded as having the tightest security of any carrier in the=20
world. At present, El Al does not fly on the Jewish Sabbath =97 a 25-hour=20
period beginning at sundown on Friday. Finance Minister Benjamin Netanyahu=
=20
has said he will not stop the new owners from flying on the Sabbath =97 a=20
move that would likely irk religious customers.

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