FIMI fund to acquire up to 47% of Israel’s El Al Airlines

261106-ElAl-4X-EBU_opt

(Reuters) – The FIMI fund agreed to invest up to $75 million in El Al Israel Airlines in return for up to 47 percent of the flag carrier, Israel’s largest private investment fund said on Sunday.  FIMI will form a controlling group in El Al with Knafaim Holdings, which owns 39 percent of the airline. Knafaim has an option to sell FIMI 30 million shares in El Al worth $5 million.

In the first stage, at the time the deal is closed, FIMI will invest up to $50 million for a 38 percent holding in El Al. The fund will receive two options worth $12.5 million each and if both are exercised FIMI will hold 47 percent.

The deal is expected to close by July 31 but FIMI can extend this deadline by a total of 90 days.

« Completion of the deal is a complicated task and requires cooperation among … management, workers and financial institutions, » FIMI founder and Chief Executive Ishay Davidi said in a statement.

He said the company and its workers are negotiating a new collective labour agreement that will enable the airline to deal with the competitive environment in which it operates. The deal is subject to the signing of a new labour agreement that is acceptable to FIMI.

« The challenges facing the company require many changes. Without generating this change the company will find it very difficult to compete, » Davidi said.

El Al posted a wider loss in the fourth quarter, hurt by a military conflict and the global downturn that depressed revenue.

In January FIMI, which has capital of $2.1 billion and has invested in 68 companies, said it was seeking to inject up to $60 million into El Al for a stake of 37.8 percent.

**

Reporting by Tova Cohen; Published by Reuters.

You can see the article here.

Responses are currently closed, but you can trackback from your own site.

Comments are closed.