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International Internet Magazine. Baltic States news & analytics Tuesday, 24.11.2020, 12:02

BAS prepared to make previously agreed upon investment in airBaltic’s capital

Alla Petrova, BC, Riga, 22.12.2011.Print version
The private shareholder of Latvian national airline airBaltic – Baltijas Aviacijas Sistemas (BAS), has decided to make the necessary financial investments in the airline's share capital, Transport Ministry State Secretary Anrijs Matiss told the business information portal today after a shareholders' meeting.

He explained that BAS is prepared to proportionately invest the airline's share capital based on percentage of shares owned in the airline, writes LETA.

If BAS invests LVL 37.7 million in airBaltic, it would regain approximately 47% shares in the airline, according to the previously agreed upon shareholders' agreement.

On the other hand, if BAS does not invest the necessary funds in the airline, the state of Latvia would continue to own 99.8% shares in airBaltic.

As reported, on December 15, Saeima supported allocating LVL 57.6 million to the Transport Ministry to increase airBaltic’s share capital. Matiss said at the time that if the airline's private shareholder BAS fails to contribute its part of the investment, airBaltic will be issued a loan of LVL 25.4 million. Therefore, the total state investment in the airline may reach LVL 83 million, of which LVL 25.4 million will be retrievable.

The state has already provided LVL 16 million of this amount to the airline, which will be capitalized. LVL 41.6 million yet to be invested in the airline will also be capitalized.

Matiss admitted at the time that BAS would hardly be able to make its part of the investment.

Matiss and airBaltic management representatives stressed that the current development scenario for the airline and the government's decision to invest money in airBaltic will ensure stabilization and restructuring of the airline.

airBaltic CEO Martin Gauss told reporters that, according to the airline's development strategy approved by the government, airBaltic fleet would be reduced by ten aircraft to 24 planes next year. Also, flights on unprofitable routes will be discontinued, but the number of flights on the other routes will be increased.

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