Will merge into a public company through Kenson at a value of NIS 100 million

Arkia reported this morning (Wednesday) the signing of a conditional memorandum of understanding for a merger into a public company in a deal that could strengthen the company’s capital base and allow Arkia to improve its competitive and business position. Arkia’s value for the purpose of the merger transaction is set at NIS 100 million and the merger will allow the use of an amount of NIS 10 million that will be provided as a cash fund in the public company.

The controlling owner of Arkia, Arkia Airways Holdings and Aviation Services Ltd., entered into an agreement with Kenzon Israel Ltd., a public company traded on the Tel Aviv Stock Exchange, to merge Arkia or alternatively the holding company, in a transaction with Kenzon or a related company, to create a public company Another containing the Arkia activity, the shares of which are listed for trading on the Tel Aviv Stock Exchange. In the event of a merger of Arkia into a related company, Arkia’s shareholders will receive 82.46% of the issued share capital of the receiving public company with NIS 10 million in its coffers and it will be free of any debt or liability.

The merger transaction depends on a number of conditions, including entering into a binding agreement, completing due diligence, obtaining regulatory and other approvals, obtaining approval from the companies’ organs and raising at least NIS 30 million from various investors in a public or private offering at the same time completing the merger transaction.

In recent years, Arkia has enjoyed a significant increase in passenger traffic and has replaced the entire fleet of turbo props with new jets, including the Embraer 195 and the Airbus 321 NEO. In the past year, Arkia has carried out significant streamlining procedures in which the collective agreements have been updated, the number of employees has been reduced and at the same time the procurement conditions and computer systems have been improved and the company is ready for the expected aviation activities.

Capricorn, Chairman and CEO of Arkia said: “With the changes taking place in the aviation industry, this is the right time to make a merger move that will march the company towards a solid future, an additional capital injection into Arkia will allow the company to increase its fleet while taking advantage of the aviation and tourism market. “More ready than ever for the expected boom in the tourism industry. Together with the company’s employees who have contributed greatly, we will continue to lead the company to growth and success.”
The merger deal is expected to be completed in the coming months.