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The Flying Cargo company, owned by Avraham and Danny Reich, is one of the two previously unknown parties that bought a substantial stake in El Al during its initial public offering on Tuesday, capital market sources said yesterday. The other is apparently a person or company active in tourism, the sources said.

The sources said Flying Cargo bought shares and options for about 15 percent of El Al, both during the issue and in off-market transactions, while the tourism investor bought shares and options for 10 percent of the company.

The Borovitz family's Knafaim-Arkia company and Koor Industries, the only group that has so far publicly acknowledged its purchase, bought 46,000 units of the issue for NIS 15 million - 38,000 during the offering and 8,000 in off-market deals. Each unit comprises a combination of shares and options.

Knafaim is not believed to have increased its stake yesterday, however, since the price of a unit rose to twice the issue price in off-market trading over the course of the day, and it announced that it also has no intention of increasing its stake when trading in the share opens today. If it exercised all its options, the company, which operates the domestic airline, Arkia, would own 22.5 percent of El Al.

The fact that three individuals or groups now own substantial packages of El Al shares and options means that one or more of them might be able to form a controlling interest if they exercise their options. A fourth player might be the company's workers, who bought 2 percent of the airline at a 30 percent discount on Tuesday and have the right to buy another 8 percent, at a 70 percent discount, at the end of 2004. They are currently setting up a corporation to manage their shares.

El Al shares and three series of options will begin trading on the Tel Aviv Stock Exchange this morning. The opening moments of trade are expected to reveal whether a battle for control is in fact going on.

Yesterday, speculation was rife over the identity of the unknown purchasers. In addition to Flying Cargo and the tourism enterprise, capital market sources spoke of a foreign investor who bought a package worth 2 percent of El Al if all the options are exercised.

One person initially cited by many media outlets as a likely purchaser was businessman Yitzhak Tshuva, owner of the Delek group. Delek, however, published a flat denial yesterday, saying that neither Tshuva nor any company in the Delek group had purchased El Al shares during Tuesday's issue.

The state yesterday published the official results of the issue, which showed that 1,700 people bid for NIS 180 million worth of units. Bidders had a choice of five packages, each containing a different ratio of shares to options, and bids for the more expensive packages (those with a higher share component) were completely filled. People who bid for the cheapest package, however, received only 40.3 percent of the amount they requested.

Altogether, the public bought 15 percent of the airline, giving the state NIS 14.6 million and El Al NIS 22.1 million. If all the options are exercised, however, the public will own some 50 percent of the airline after a year and 91 percent after 2004. In this case the state would receive a total of NIS 110 million - all of which would be deposited into El Al employees' seriously underfunded compensation fund.