Business Group Advances Acquisition Outline for Arkia Israeli Airlines Amid Ownership Dispute
Three businessmen have advanced a preliminary outline to acquire Arkia Israeli Airlines, injecting tens of million of dollars to avert insolvency. The move faces resistance from the Nakash brothers, who are attempting to dilute employee stakes and block the deal.
A group of three businessmen has reached a preliminary agreement on a outline to acquire the Israeli airline Arkia Israeli Airlines. According to local media reports, Yariv Lerner, Avi Alkayam, and George Varour are advancing the initiative. Varour and Alkayam have already reached understandings with Avi Nakash and the TOOT employees' corporation, which holds a 22% stake in the airline and possesses veto power over the identity of its buyers.
The preliminary outline was signed by Varour and Alkayam through a joint company they own. Varour is a Christian-Arab businessman and co-owner of the Hapoel Ramat HaSharon football club, who previously attempted to acquire Hapoel Tel Aviv and Beitar Jerusalem, having made his fortune in lab-grown diamond manufacturing and operating primarily from Dubai. Alkayam is the controlling shareholder of the Shahar services company and a co-owner of the young insurance firm Anchor. Lerner, the most prominent of the three, is expected to join the others pending due diligence that could lead to a definitive deal. Lerner specializes in corporate turnarounds and holds joint control of Negev Ceramics, which he acquired during financial distress and returned to the stock exchange, as well as the mobile operator Wecom, which is currently undergoing a sale process to Pelephone.
The proposed deal entails an injection of tens of millions of dollars into Arkia Israeli Airlines, whose equity deficit is estimated at $50 million to $60 million. Without an immediate capital infusion, the carrier risks facing insolvency. However, several obstacles remain on the path to finalizing the transaction. Other members of the Nakash family—namely Joe and Rafi Nakash, along with their representative Avi Churmoro—are simultaneously holding talks with other parties and attempting to dilute the employees' stake in the airline. This move has triggered a severe confrontation between the owners and the workforce, who threaten to launch labor sanctions next week.
Avi Nakash is no longer involved in the day-to-day management of the airline, serving solely as a shareholder, but his brothers have brought back their representative Avi Churmoro, who is currently embroiled in a bitter dispute with Avi Nakash. Reportedly, the Nakash brothers intend to inject tens of millions of dollars into Arkia Israeli Airlines themselves in order to restructure the company, dilute employee holdings, and prepare it for a future sale at a higher valuation. Under the current acquisition outline, funds are earmarked for direct injection into the company, meaning the brothers would not receive cash proceeds for their shares. Independent capital injection would allow them to retain control and sell the carrier later under more favorable conditions.
In a letter sent to the company's employees, Avi Edri, chairman of the TOOT board of directors, claimed that the Nakash group insisted on rejecting a sale to investor Elliott Zemel, who was prepared to invest approximately 150 million shekels to acquire the airline. According to Edri, the Nakash brothers clung to a deal with New York-based Haredi businessman Ezra Junger, who sought to halt the airline's operations on Saturdays, a move opposed by the workforce. Edri warned that the Nakash group plans to submit a resolution on Sunday aimed at dismantling the employees' corporations at Arkia Israeli Airlines, violating prior agreements. Meanwhile, industry experts note that the prospect of a deal with Israir Airlines remains near zero, primarily due to Arkia's urgent capital requirements and the lengthy antitrust approval process such a merger would entail.
