The Latvian national airline airBaltic has submitted to the Ministry of Transport a solution to recover the 250 million euros invested in the company’s capital in the summer, confirmed airBaltic CEO Martins Gauss, adding that the proposal, as previously reported, envisages selling the airline’s shares on the stock exchange.
“We have submitted information on how we propose to do this, the Ministry of Transport and the Ministry must then submit it to the Cabinet of Ministers. As we already know, we offer to start listing airBaltic shares on the stock exchange. “Gauss said.
He said that the initial public offering (IPO) should be such that the state could recover at least 250 million euros by selling the existing shares.
“The European Commission has also been informed about this plan, because it was intended when we received the money. The government has to look at it and say – yes, we will do it,” Gauss said.
He added that an alternative solution was to find one buyer who would be willing to buy airBaltic shares for 250 million euros from the state, but this could be a very unlikely scenario in the coming years. In addition, if the IPO is successful, more than € 250 million will be available for the shares.
Gauss revealed that the airline will encourage the government to conduct an IPO of 500 million euros. “At the same time, it would be premature to give specific figures, because we have not even attracted the bank to the IPO. But our goal is definitely the biggest IPO in the Baltics, because airBaltic’s story is global on the one hand and very local on the other. The process is almost always more important than dry figures, “he said.
Gauss also mentioned that airBaltic shares should definitely be listed on the Nasdaq Riga stock exchange, so that they could easily be bought by Latvians as well, but the IPO is planned to be large, so the shares will most likely be listed on another major securities market.
“I think that the interest in airBaltic shares will be great, because we will emerge from this crisis strongly and look good against the background of many other airlines. [Norvēģijas zemo cenu aviokompānija] Norwegian is already going through bankruptcy proceedings and many are struggling much harder than airBaltic. We also expect that the interest in the shares will be not only from investors, but also from Latvian individuals, “said Gauss.
It has already been reported that the European Commission, after several months of evaluation in early July, supported the Latvian government’s decision to invest 250 million euros in airBaltic’s share capital to support the Covid-19 crisis.
At the same time, the European Commission’s decision stipulates that Latvia must recover the investment within five to seven years. The government had to submit a return proposal to the European Commission within a year, while airBaltic had to submit a return proposal to the government within six months.
Due to the Covid-19 pandemic, the airBaltic Group’s turnover in the first half of this year decreased by 63.6% to 78.713 million euros, while the group’s losses increased almost seven times and amounted to 184.77 million euros. AirBaltic’s audited turnover last year was 503.281 million euros, which is 23.1% more than in 2018, but the company suffered a loss of 7.729 million euros compared to the profit a year earlier.
The Latvian state owns 96.14% of the voting rights in the capital of airBaltic, but the financial investor, Danish businessman Lars Tussen, owns Aircraft Leasing 1 – 3.86%.
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