Israeli flag-carrier El Al has firmed its agreement with travel company Issta following their tentative deal to establish a tourism and package-holiday joint venture.
El Al says it will hold 60% of the new subsidiary’s shares while Issta takes the 40% balance.
The venture will develop, market and sell tourism products and services including travel packages comprising flights, hotels and related financial arrangements.
Under the agreement Issta has consented to El Al senior figures – including Kenny Rozenberg, Eli Rozenberg, and Daryl Hagler – to hold up to 20% of the venture through the El Al shareholding, if legal approval is obtained.
As part of the deal Issta will purchase around 12.4 million shares of El Al at a price of 3.3 ($0.89) shekels per share, through a private allocation.
El Al has also reached an ancillary agreement covering provision of various services – including the use of infrastructure – to the venture, adding that these contributions are likely to decrease as the venture “becomes independent in its activities”.
Neither El Al nor Issta will be able to enter similar ventures with third parties for the sale of tourism packages, says the carrier.