First Israel Mezzanine Investors Fund (FIMI), run by CEO Ishai Davidi, has given El Al Israel Airlines Ltd. (TASE: ELAL) an extension to reach an agreement with its employees, which is a condition for FIMI's investment in the airline. FIMI gave El Al 45 days from July 16 until August 29, under the terms of the investment agreement.
In a notice to the TASE today, El Al said, "FIMI stated that in view of the slow progress in the talks on a new labor contract between the company and its employees, and because signing this agreement to FIMI's satisfaction is one of the conditions for closing the investment agreement, FIMI believes that there is little chance that the investment will be made on the date set in the investment agreement. In order to improve the chances of closing the deal, FIMI is extending the agreement.
"FIMI stated that, despite the extension and the importance that FIMI attaches to El Al, which is one of the most important companies in the Israeli economy, and in view of its assessment about the low likelihood of realizing the deal in accordance with the investment agreement, FIMI is allowing the company, notwithstanding what is stated in the investment agreement, to approach and manage negotiations, and even close a deal with another investor who will be prepared to invest in the company (either together with, or instead of, FIMI)."
In April, FIMI and El Al, controlled by the Borovich family through Knafaim Holdings Ltd. (TASE: KNFM), and managed by CEO Elyezer Shkedy, signed an agreement for FIMI to invest $75 million in the airline in exchange for a 48% stake in it. The agreement is subject to El Al signing a new labor contract with its employees, among other conditions.
Published by Globes [online], Israel business news - www.globes-online.com - on July 14, 2013
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