Knafaim-Arkia Holdings is in negotiations to increase its stake in El Al Israel Airlines by purchasing Delek Investments' 3.0 percent shareholding, Knafaim said on Tuesday.

In a statement to the Tel Aviv Stock Exchange, Knafaim said it already has power of attorney from Delek for the voting rights to the El Al shares.

Knafaim said that in addition to extending the power of attorney, Delek is expected to grant Knafaim the right of first refusal to buy the shares in El Al.

Knafaim, which owns a small Israeli carrier called Arkia Airlines, holds a stake of nearly 25 percent in El Al but has options which, if exercised, would give it 52 percent of the national carrier.

The head of Knafaim, Izzy Borovich, said he plans next week to exercise enough options to take control of El Al.

(Reuters)