After more than two decades of intermittent discussion, the cabinet privatization committee on Thursday approved the partial privatization of Israel Aerospace Industries by listing an unspecified minority stake on the Tel Aviv Stock Exchange.
Ministers approved a plan that gives IAI and the Government Corporations Authority 130 day to prepare a plan that not only includes the terms for an initial public offering, but a new collective labor agreement with IAI workers. The shares are expected to be sold at a company valuation of between 10 billion and 14 billion shekels ($3 billion and $4.2 billion).
A defense contractor with some civilian aviation businesses, state-owned IAI is the largest state-owned company by number of employees – about 16,000. It had revenues of $2.1 billion in the first half of this year and a net profit of $48 million from anti-missile systems, drones and precision-guided weapons, mostly for export.
Privatization has wide support both inside the company, including its chairman, Harel Locker, and Yair Katz, who heads the IAI workers’ committee, and among Israel’s political leadership. Prime Minister Benjamin Netanyahu has long supported the idea, and Defense Minister Benny Gantz didn’t express any opposition to the plan. Given the fractured coalition, the vote was a major political achievement. (end of excerpt)
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