Israeli flag-carrier El Al must carry out a planned $150 million share issue by the end of August, before the country’s government will back a $250 million bank loan.

The conditions have been outlined in a 22 July letter from the ministry of finance.

El Al opted in early July to pursue the joint loan and share issue, after a prolonged effort to negotiate a $400 million loan package with the ministry.

The airline says it has been informed “for the first time” that the state guarantee for the $250 million loan will be granted “only after” the shares are issued.

El Al has previously stressed that near-term funding is critical to its future, and has yet to indicate whether the timing attached to the package will affect its operation.

The airline has already extended the suspension of flights until 31 August, a decision which affects 6,100 employees.

El Al says the ministry has agreed to release $10 million from a compensation fund which, at the end of June, had a surplus of 230 million shekels ($67 million).