Airport, EU – Baltic States, Financial Services, Latvia, Transport

On Tuesday, August 4, a contribution of EUR 250 million from the Latvian national budget was registered in the share capital of the airline, increasing the state's participation in the airline's capital from 80.05 percent to 91 percent.

Previously, airBaltic's share capital was EUR 256.473 million.

The government's investment in the airline's share capital is a recapitalization measure, therefore it should meet a number of preconditions. Recapitalization should entice progressivity mechanism that would stimulate the recipient to purchase back the government's investment or sell the investment to a third party. The state would then receive 10 percent of investment that has not been sold in an agreed period of time.

So far the share capital consisted of 256,472,824 one category dematerialized bearer shares with a face value of EUR 1.

The share capital is increased by EUR 250 million, and now will consist of three types of shares. The existing 256,472,824 shares will be converted into category A shares with a face value of EUR 1. The new shares include up to 715,681,616 category B shares with a face value of EUR 0.3 and up to 352,955,152 category C shares with a face value of EUR 0.1. 

As reported, the decision of the European Commission (EC), which allows the state to invest EUR 250 million in the share capital of the Latvian national airline airBaltic, envisages Latvia recovering the investment within five to seven years.

Last month, the European Commission supported the Latvian government's decision to invest up to EUR 250 million in the share capital of Latvian airline airBaltic to help the airline overcome the consequences of the Covid-19 crisis.

The government plans to inject EUR 250 million in airBaltic's share capital and convert a EUR 36 million government loan into company shares. As a result of these support measures, the state will increase its stake in airBaltic from 80.05 percent to 91 percent.