The FIMI fund, Israel's first dedicated mezzanine and buy-out fund managing over US$1B, has called off an agreement signed last April to invest up to USD$75 million in El Al Israel Airlines Ltd. after the Israeli flag carrier failed to reach a new employment contract with its workers.
FIMI, agreed in April to inject cash into El Al in return for up to 47% of the airline. FIMI was to form a controlling group in El Al with Knafaim Holdings, which owns 39%.
The deal was contingent on El Al reaching a new collective agreement aimed at allowing the carrier to deal with an increasingly competitive environment. It was supposed to close on July 31 but FIMI gave El Al an extension to close a labor deal.
"FIMI has informed El Al that it is cancelling the agreement to invest because the conditions had not been met," El Al said in a statement to the Tel Aviv Stock Exchange on Thursday.