FIMI Fund seeks to join control of Israel's El Al airline

JERUSALEM Thu Jan 31, 2013 11:19am EST

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JERUSALEM Jan 31 (Reuters) - The FIMI fund said is in talks to join a group that controls flag carrier El Al Israel Airlines , Israel's largest private investment fund said on Thursday.

El Al is controlled by Knafaim Holdings with a 39.33 percent stake.

FIMI said it seeks to inject up to $60 million into the airline, which posted a 79 percent rise in profit in the third quarter but has struggled in recent years due to high fuel costs.

In the first stage, FIMI would initially buy 5.71 percent of El Al's shares with an investment of $5 million. It will buy about 30 million shares at 0.625 shekel each. FIMI also seeks to pay another $5 million for shares owned by Knafaim that would raise its stake in the airline to 11.41 percent.

In a second stage no later than Aug. 30, FIMI would invest a$30 million in exchange for an allocation of 180 million additional shares that would boost its stake to 25.5 percent. This stage is conditioned upon the airline reaching a collective bargaining agreement with the its workers.

FIMI also could exercise options for another 12.3 percent at a total cost of $20 million in 2014 and 2016.

El Al's Tel Aviv-listed shares closed 0.2 percent lower to 0.456 shekel. (Reporting by Steven Scheer)

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