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| El Al plane |
A large portion of Israel’s national airline was sold to an investment fund, according to press reports in the United States.
The FIMI fund agreed to invest up to $75 million in El Al Israel Airlines in exchange for up to 47 percent of the company, the largest private equity fund in Israel said this week.
FIMI will form a controlling group in the airline together with with Knafaim Holdings, which owns 39 percent of the airline. Knafaim has an option to sell 30 million El Al shares to FIMI 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 stake in El Al. The fund will receive two options worth $12.5 million each, and if both are exercised FIMI will hold a total of 47 percent of the airline.
The deal is expected to close by July 31, but FIMI may extend this period for a total of 90 days.
The company and its workers are negotiating a new collective agreement that will allow the airline to cope with the competitive environment in which it operates. The agreement 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," an airline spokesperson said.
“It is nice to see that El Al can attract large investments in order to keep it in operation. Many people just love traveling with El Al Israel Airlines over all other airlines,” Julie Krueger, 67, of the Bronx, New York told YourJewishNews.com after learning about the investment.
El Al posted a larger loss in the fourth quarter, affected by military conflict and the global financial crisis.