The workers union of Arkia Airlines has called off its deal to buy the company from Knafaim Arkia Holdings after the employees failed to realize some unresolved terms of the contract in time for the September 30 deadline, Knafaim said Thursday.
The union, representing the airlines 750 workers, agreed to buy 75 percent of Arkia for $12 million at the end of March and were given six months to close the deal, which would have increased their stake in the company to full control.
Knafaim said that its management met with the workers and their partners in the deal the Nekesh Group on Thursday at which they were informed by the employees that the conditions were as yet not fulfilled and that they would therefore cancel the agreement at the end of the month.
Arkia was put on the selling block after Knafaim owners Izzy and Dedi Borovich bought the government's stake in El Al, gaining a controlling 40% share in the airline.
The sale was in line with Antitrust Commissioner Dror Strum's order for Knafaim to divest itself of all holdings in tourism and aviation as a precondition to approving the El Al deal. Knafaim is still required to sell the company.
Shares of Knafaim rose 0.8% to NIS 53.12 in Tel Aviv.