El Al: FIMI’s $75 Million Investment Likely to Fall Through

FIMI fund extends deadline by 45 days but airline management must sign new collective bargaining agreement with employees for deal to proceed.

Eran Azran
Eran Azran
Send in e-mailSend in e-mail
Eran Azran
Eran Azran

Chances are slim that local investment fund FIMI will follow through with its proposed deal to buy a 47% stake in El Al for $75 million, the Israeli airline announced Wednesday.

However, despite El Al's assessment, FIMI extended the deadline for carrying out the deal by another 45 days, after an initial extension in July.

The main reason the deal has become bogged down is El Al management's failure to reach a collective bargaining agreement with the company's employees.

FIMI conditioned its investment deal on a new labor agreement at the airline.

FIMI: Labor deal could turn airline around

Sources close to FIMI stated that if a new labor deal were signed in which all sides made concessions, the perennial loss-generating airline could be turned around into a profitable venture.

El Al management sources estimated that surplus manpower costs the company NIS 400 million per year.

Based on an agreement signed by FIMI and El Al in April, in the first stage of the investment deal the fund would invest $50 million for a 38% stake in the airline. This would have given the fund control of the airline along with Knafaim Holdings, its largest current shareholder.

The fund would also have received two stock option grants, each for $12.5 million, that if exercised would let it increase its stake in El Al to 47%.

An El Al Israel Airlines airplane sitting on the tarmac at JFK Airport in New York.Credit: Bloomberg

Click the alert icon to follow topics:

Comments

SUBSCRIBERS JOIN THE CONVERSATION FASTER

Automatic approval of subscriber comments.

Subscribe today and save 40%

Already signed up? LOG IN

ICYMI

Palestinians search through the rubble of a building in which Khaled Mansour, a top Islamic Jihad militant was killed following an Israeli airstrike in Rafah, southern Gaza strip, on Sunday.

Gazans Are Tired of Pointless Wars and Destruction, and Hamas Listens to Them

Trump and Netanyahu at the White House in Washington, in 2020.

Three Years Later, Israelis Find Out What Trump Really Thought of Netanyahu

German soldier.

The Rival Jewish Spies Who Almost Changed the Course of WWII

Rio. Not all Jewish men wear black hats.

What Does a Jew Look Like? The Brits Don't Seem to Know

Galon. “I’m coming to accomplish a specific mission: to increase Meretz’s strength and ensure that the party will not tread water around the electoral threshold. If Meretz will be large enough, it will be the basis for a Jewish-Arab partnership.” Daniel Tchetchik

'I Have No Illusions About Ending the Occupation, but the Government Needs the Left'

Soldiers using warfare devices made by the Israeli defense electronics company Elbit Systems.

Russia-Ukraine War Catapults Israeli Arms Industry to Global Stage