TEL AVIV, ISRAEL — Israeli leisure company Israir Group is engaging in "intensive negotiations" with the owners of Czech airline Smartwings to reach an agreement on acquiring the carrier. 

While Israir Group states that the tender process has progressed, it emphasizes that it might not be the only interested party and is unaware of any ongoing negotiations with other potential buyers.

Smartwings is 51% owned by entities under the control of Roman Vik and Jiri Simane, with the remaining stake held by the Chinese economics ministry. Israir Group is working to reach a deal that would allow both parties to sign a binding memorandum of understanding.

Israir Group's offer, valued at €44 million, includes an €8 million purchase of share capital, €12 million for partial owner loan repayment, and a €24 million provision to cover the remaining loan repayment balance. Smartwings operates over 40 aircraft, transporting more than 6 million passengers from bases in Prague, Warsaw, Budapest, and Paris.

Israir Group believes that the acquisition would provide new destinations, synergies, reduced expenses, and an increase in the overall group value. The company reported a full-year net profit of $20.6 million, reversing a net loss of $34.6 million in the previous year, with revenues of nearly $358 million.

Israir Group asserts that it demonstrated a "complete recovery" from the pandemic, despite a $22 million financial impact from a 50% increase in oil prices. The company also faced operational challenges in Israel, higher operating costs, and increased customer claims related to delays. Israir Group is 60.2% owned by entities controlled by investors Rami Levy and Shalom Haim, while the remaining 39.8% is publicly owned.