Airport, Banks, Financial Services, Investments, Latvia, Legislation, Transport

Valdis Dombrovskis and Andris Berzins. Riga, 30.11.2011. Photo: president.lv

Berzins emphasized that this is a very important matter currently on the government's agenda. Looking at this in the context with the Latvijas Krajbanka affair, the government may haveto take over airBaltic, writes LETA.

On the other hand, Dombrovskis was once again evasive on comments regarding airBaltic. He said that the Transport Ministry will make public more information regarding the situation in the coming days.

As reported, the government has already gotten down to preparations for taking over national airline airBaltic's shares held by the private shareholder, as LETA found out last night.

This has been discussed with the Saeima Budget and Finance Committee, which most probably approved the deal in principle. as well as increasing the Transport Ministry's budget for this year.

Dombrovskis has declined to comment the government's plans for the airline's future. When asked whether the government was considering taking over airBaltic shares held by Baltijas Aviacijas sistemas (BAS), Dombrovskis could only say that the matter had been reviewed by the government in a closed meeting, and that this information was classified.

Dombrovskis only added that the Transport Ministry would be in charge of any further developments regarding airBaltic.

LETA has been unable to get in touch with BAS board member Inga Piterniece so far, whereas another BAS representative, Juris Petersons said that BAS had no comment at the moment.

The government meeting behind closed doors yesterday, called to discuss the situation in airBaltic in the wake of Latvijas Krajbanka and Lithuanian bank Snoras collapse, continued for almost three hours. Both banks were BAS creditors, making it possible for BAS to invest money in the airline.

Transport Ministry State Secretary Anrijs Matiss told reporters after the government meeting that there were no guarantees that BAS would be able to make the next part of its investment in the airline's share capital, and that several options were being weighed.

The government has so far invested LVL 16 million in the airline, and BAS has invested LVL 14 million. By December 15, the state is to invest another LVL 41.6 million, whereas BAS – LVL 37.7 million.

If BAS is unable to make its part of the investment, the government will have to decide whether to continue investments in airBaltic and whether to assume the private shareholder's obligations, or find another investor that would invest money in the airline's share capital instead of BAS.

As reported, if BAS fails to provide a loan to the airline as it has agreed to, BAS will have to sell all of its airBaltic shares to the state for one lat, as provided for in the airBaltic shareholders' agreement. A copy of a report on the secret agreement between the airBaltic shareholders and creditors that has been obtained by "Pietiek.com" stipulates that if BAS fails to honor its liabilities, airBaltic creditors will also have to sell all their claims on the airline and BAS to the state for one lat.

LETA also reported, the agreement on increasing airBaltic share capital, signed by the airline's shareholders on October 3, stipulates that the state and BAS would jointly invest EUR 153 million (LVL 107.1 million) into the airline's share capital. The agreement was also signed by the airline's creditors including the Lithuanian bank Snoras and Latvijas Krajbanka.