Israeli flag-carrier El Al is negotiating with Tel Aviv-based investment firm FIMI over a potential injection of up to $60 million, through which FIMI would acquire a substantial stake in the airline.
The two sides have signed a memorandum of understanding laying out a basic transaction proposal, which would involve several stages.
FIMI would initially invest $10 million in the carrier to pick up an 11.4% shareholding, of which about half would come from the stake of core shareholder Knafaim Holdings.
Under a second stage - the main investment - FIMI would inject $30 million for shares equating to about 25% of the company. This would take place before the end of August 2013.
El Al says, however, that this is "conditional" upon employees' signing a new collective agreement.
The tentative pact also covers two further investment options, the carrier adds.
FIMI could exercise an option until the end of June 2014 to put another $10 million into El Al shares, constituting some 7.5% of the company, while a second option - extending to June 2016 - covers a further $10 million investment.
El Al says that FIMI is to conduct due diligence on the airline and the two sides have agreed to keep negotiations exclusive for the next 45 days. It adds that a firm deal will depend on regulatory approval.