The offer will be accompanied by a warning that the state will have to buy all unsold shares, meaning that the state can once back the airline’s majority shareholder.
The airline was privatized in 2004 and is recently controlled through Knafaim Holdings Ltd, which will have its shares diluted.
Last week, the airline stopped flights after labor negotiations broke out between the pilots committee and the administration, and pilots refused to administer the flights.
Management then fired 500 other employees, adding a hundred pilots, as well as maintenance officers, flight attendants and floor crews.
Hundreds of food services from the subsidiary of El Al Tamam, which produces kosher food for several carriers operating through Ben Gurion International Airport, have also been fired, raising considerations about the option of mass layoffs.
The company also owes about $350 million to passengers whose flights were cancelled due to the pandemic.
A quarterly report for January-March released last week reported $140 million in losses to the company in the first quarter of 2020, at $55 million in losses for it last year. Revenues declined to $320 million in the quarter, down from $428 million last year.
The airline suspended the suspension of scheduled advertising flights until the end of July, but prior to the labor dispute, it said it would continue to use its aircraft for shipping and occasional passenger flights.
Meanwhile, the Israel airline announced Wednesday that it had signed settlements with monetary establishments and would obtain a rescue loan of 140 million shekels (about $40 million), with the state acting as guarantor of 75% of the amount.
The loan will be split between Bank Mizrahi and First International Bank to minimize risk, Ynet’s online news page reported. The loan must be repaid within seven years, with only interest paid in the first year.