Pujo Zabludowicz mulls raising stake in El Al parent

The investment will only be made after the investment by FIMI to become part of El Al's controlling core is closed.

Sources inform ''Globes'' that Pujo Zabludowicz, who owns 17% of El Al Israel Airlines Ltd. (TASE: ELAL) controlling shareholder Knafaim Holdings Ltd. (TASE: KNFM) through his investment company Tamares, may inject capital to increase his stake in Knafaim or its subsidiaries, probably Global Leasing Ltd. The investment will only be made after the investment by First Israel Mezzanine Investors Fund (FIMI) to become part of El Al's controlling core is closed.

FIMI's investment in El Al is subject to due diligence, especially the signing and implementation of a new labor contract, which is acceptable to FIMI, by the airline's management and current owners. El Al has 5,800 employees, two-thirds of whom have tenure. The airline's management and workers committee have failed for years to reach an agreement, which would stabilize labor relations.

Pujo Zabludowicz, the son of the late Shlomo Zabludowicz, a Holocaust survivor who became a Finnish arms manufacturer and who founded with Koor Industries Ltd. (TASE:KOR) the Soltam Systems arms plant in Yokne'am in the 1950s. Pujo Zabludowicz's Tamares Group is a holding company registered in Liechtenstein. He resides in London and has a house in Caesarea.

Tamares Israel, managed by Yodfat Harel Buchris, has made hundreds of millions of shekels in real estate (through British Israel, which was sold to Ofer Investments Ltd. unit Melisron Ltd. (TASE: MLSR)), hotels through Tamares Hotels Ltd., telecommunications services through Tamares Telecom Ltd., and in the life sciences, through an investment in the Pontifax fund.

Tamares invested in Knafaim in 2006. There have been consist rumors that Knafaim's controlling shareholders, the Borovich family, have asked Pujo Zabludowicz to increase his stake in the company, especially during business or family crises. He has not done so, and there have been several reports that he is displeased about El Al's labor relations and the airline's place in the aviation industry.

Tamares Israel declined to comment on the report.

Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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