FIMI buys 47% stake in El Al

Victoria
By Victoria April 1, 2013 10:25

FIMI buys 47% stake in El Al

First Israel Mezzanine Investors Fund (FIMI) has bought a 47% stake in El Al Israel Airlines for $75 million. FIMI will form a control group with Knafaim Holdings Ltd. FIMI will initially invest $50 million in El Al for a 38% stake. FIMI will also receive two options, each totaling $12.5m which will give it a 47% stake in the airline when exercised. The deal is due to close in July.
The deal is subject to approval by El Al’s shareholders and obtaining regulatory permits. However it is also subject to El Al employees signing new contracts on terms that “FIMI deems satisfactory”. This will involve a fight and we will see how in touch with staff the management are over the next few weeks. If all this comes off though El Al will be on the way to having a low-cost base from which it can build. Expansion though will depend on security levels at gates lowering – that of course depends on matters outside of El Al control.
FIMI CEO Ishai Davidi stated: “Signing on the investment in El Al is a very important step on a long road to closing the deal. Closing the deal is a complicated task, which requires cooperation by all the parties at the airline and in the business environment – managers, employees, and financial institutions. Regardless of the acquisition of control by FIMI, the airline and its employees are in talks on a new collective agreement, which must allow the company to deal with the very competitive market in which it operates. The challenges facing the airline require many changes. Without change, it will be very hard for the airline to deal with the difficult environment it faces.”

Victoria
By Victoria April 1, 2013 10:25
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