Jan. 31 (Bloomberg) -- El Al Israel Airlines Ltd. said it has reached an understanding with Fimi Opportunity Funds for an investment of as much as $60 million in the flagship carrier.
Tel Aviv-based Fimi has agreed to invest an initial $10 million for a 11.41 percent stake in the Lod, Israel-based El Al, according to a filing to the Tel-Aviv Stock Exchange today after markets closed. Part of the stake will be bought from controlling shareholder Knafaim Holdings Ltd. The rest of the investment will be made at a second stage, conditional upon a renegotiation of El Al employee contracts, the filing said.
Fimi’s investment comes as the carrier’s shares trade near a record low as higher global oil prices increased operating costs and competition intensified as discount European carriers entered the local market. The company is also struggling to boost profitability, posting losses in three out of the last four years.
El Al shares dropped 0.2 percent to 0.458 shekel today. Knafaim shares fell 7.8 percent to 10.10 shekels.
To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at email@example.com
To contact the editor responsible for this story: Claudia Maedler at firstname.lastname@example.org