FIMI fund to acquire up to 47% of El Al
Israel's largest private investment fund to invest up to $75 million in country's flag carrier
FIMI will form a controlling group in El Al with Knafaim Holdings, which owns 39% 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% holding in El Al. The fund will receive two options worth $12.5 million each and if both are exercised FIMI will hold 47%.
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 labor 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 labor 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%.
