Israeli insurer Phoenix has exercised an option to buy roughly 20% of El Al Israel Airlines' frequent flier program. El Al said that following the deal, it would no longer need to raise additional capital.
El Al, Israel's flag carrier, will receive $14 million and own 80.1% of its frequent flier program and it said it would post a gain of about $63 million in its third-quarter financial results. In March, cash-strapped El Al signed a non-binding deal for a $130 million loan from Phoenix and put up its Matmid frequent flier club as collateral for the loan. Phoenix received an option to buy 25% of Matmid by the end of 2027.
On Sunday, El Al said it plans to repay a $45 million loan that it took from the government during the COVID-19 pandemic by the end of the year amid improvement in the travel landscape.