Latvia, Legislation, Transport

International Internet Magazine. Baltic States news & analytics Monday, 11.12.2023, 23:37

Latvia will not use its rights to buy airBaltic shares

Alla Petrova, BC, Riga, 17.12.2008.Print version
Latvia will not take advantage of its pre-emptive rights to purchase the airBaltic shares currently owned by the Scandinavian Airlines (SAS), as the Cabinet of Ministers decided at a closed meeting yesterday.

Transport Minister Ainars Slesers (Latvia's First Party/Latvia's Way) explained to media representatives that LVL 47 million would be necessary for buying the 47.2% of airBaltic shares that belong to the SAS – the actual cost of the shares is LVL 14 million, but the rest of the sum would be needed to pay back loans from intermediary companies, informs LETA.


Slesers expressed regrets that the state cannot take over full control of the airline airBaltic due to the government's lack of resources.


President of airBaltic Bertolt Flick had no comment on the situation before or after the government meeting.


As reported, in mid-August this year, SAS announced that it intends to sell its stake in airBaltic. The state of Latvia had the pre-emptive rights to offer airline shares' purchase deal.


The decision of SAS to sell its shares was influenced by the fact that the government of Latvia declined offers for privatization of airBaltic.


Slesers had previously underlined that he would not support airBaltic's privatization as eventually it would not be in Latvia's interest. Slesers also said that the airline's development is very successful at the moment.


The newspaper Dienas Bizness reported earlier that the current value of airBaltic at the moment is approximately LVL 10 million to LVL 25 million, compared with LVL 50-70 million a year ago.


As reported, airBaltic operated with SEK 105 million (LVL 7.88 million) losses, according to an announcement, made by the SAS.


Last year the airline posted LVL 163 million turnover, a 40% increase on the turnover figure in 2006, when it was LVL 115.9 million. Turnover of airBaltic in 2005 was LVL 84.62 million.


airBaltic was founded in 1995, the government of Latvia with 52.6% of the shares is the majority shareholder, whereas SAS owns 47.2% of airline's shares.

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