Arkia Airlines employees bought the company

Israel's Knafaim-Arkia Holdings signed an agreement to sell its airline Arkia to the company's 800 workers for USD$12 million, it said last Wednesday. Knafaim is the largest shareholder in Israel's major carrier, El Al Israel Airlines.
 
It currently owns 40% of El Al. Knafaim had to sell Arkia, a small carrier that flies domestic routes as well as to some European destinations, in order to comply with regulations of the anti-trust authority.The purchase therefore fulfills some of the preconditions set by Antitrust Commissioner Dror Strum for the Knafaim-El Al merger.
 
The workers had held 25 percent of Arkia shares prior to this week's buy out.Under the deal, the workers also received an option to buy Knafaim's shares in the travel agencies Issta and Kishrei Te'ufa, at a price to be determined by a mutually agreed assessor. Knafaim owns 25% of both companies. The sale of Arkia is yet to be approved by the anti-trust authority.
 
Meanwhile, Knafaim published its financial statements for 2004 yesterday. The company reported a 3.3 percent decline in revenues compared to 2003, from $174.9 million to $169.1 million. Nevertheless, it turned a profit of $1.46 million for the year, compared to a loss of $2 million in 2003. 
 
A Spokesman for the workers said that Arkia employees are not planning to manage the airline themselves, but will place it in the hands of professional management. Late last week it became known that the workers had received offers from potential investors but failed to reveal any names. Rumors were that the Nakash brothers, who earlier expressed interest for the acquisition of Arkia, are considered to be one possibility.