Interesting movements in 2013
6th February 2013
El Al has closed a transaction to monetise its loyalty club. The Israeli airline has sold its Matmid Frequent Flyers Club to a wholly-owned subsidiary and has provided The Phoenix Group with an option to purchase 25% of the shares of in EL AL’s Frequent Flyer Club Company in return for a $130 million loan. EL AL and the Phoenix signed the transaction on June 24.
The Phoenix is a leading Israeli multi-line insurance, asset management, investment, and financial services provider, which manages $100bn in assets.
Dina Ben-Tal, EL AL's CEO, described the deal as an “expression of faith by one of the leading Israeli institutions in the future of the company and in our activities towards its recovery”. Ben-Tal added: “Moreover, it indicates the potential value of EL AL. We believe that the relations with the Phoenix will grow into a strong and long-term partnership.”
EL AL is emphasizing Phoenix’s role as a strategic partner for the Frequent Flyer Club. The Israeli airline has also welcomed the expected future partnership between the two companies in order to “improve the customer experience and to extend the variety of value propositions of both”.
This deal is expected to strengthen EL AL’s liquidity and financial strength, to accelerate the implementation of the recovery program that was determined with the state, and also to allow strategic investments in the aircraft fleet.
Eyal Ben-Simon, the Phoenix CEO, commented: “This transaction, which creates for us a long-term partnership in the Frequent Flyer Club, reflects our faith in Dina Ben-Tal, EL AL CEO, and the company management. We are happy and welcome this partnership.”
Ben-Tal expressed her hope that the transaction with the Phoenix and its faith in the future of the airline will encourage other institutional bodies to express an interest in investing in EL AL: “This transaction indicates the potential value of EL AL and its Matmid Frequent Flyers Club.”
Ben-Tal added: “I want to thank the Chairman of EL AL's board, Mr. Amikam Ben-Zvi and the controlling shareholders for their faith and support in completing the transaction. A special thanks to Yitzhak (Itzik) Eliav, EL EL’s CFO, for leading a complicated and professional process; to Ronen Galperin, CEO of Matmid Frequent Flyers Club, EL AL's legal department, and our attorneys from the law firms Yigal Arnon & Co. and S. Horowitz & Co.
“In addition, I want to personally thank Eyal Ben-Simon, the Phoenix CEO, Haggai Schreiber, the Phoenix’s Chief Investment Officer, Dvora Margovsky, Head of Credit and their attorneys from Gornitzky & Co law firm. I believe the relations with the Phoenix will grow into a strong and long-term partnership."