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Augulis: Several potential investors likely to begin due diligence for airBaltic soon

RIGA - Several potential investors are likely to start due diligence for the acquisition of Latvia’s national carrier airBaltic in the nearest future, Transport Minister Uldis Augulis (Greens/Farmers) told journalists after a government meeting today.

The minister said that the Cabinet of Ministers today was informed about progress on attracting a strategic investor for airBaltic. The company has so far been offered to more than 40 potential investors from various countries and the plan is to complete the process by the end of this year.

Augulis said that talks are ongoing with many potential investors, several of whom might start due diligence soon.

None of the potential investors are from Russia, the minister said.

In Augulis’ words, the government still wants to keep more than 50 percent of airBaltic shares and the airline’s would-be investor is also expected to not reduce the carrier’s route network and to maintain Riga Airport as the airline’s home base.

Listing of airBaltic on the stock exchange is not being considered at the moment, Augulis said.

airBaltic CEO Martin Gauss said that so far everything has been going successfully and according to the schedule.

He also said that the airline could carry through with its fleet upgrade plan also without attracting an investor. Gauss noted that the company has not only purchased new CS300 aircraft but is also planning to replace its existing turboprop planes.

As reported, Horizon 2021, the business plan of Latvian national carrier airBaltic, provides for attraction of additional capital worth EUR 50 million, but the airline will not request further investments from the state.

The Latvian government has resolved to find a strategic investor by the end of 2017. International financial consultancy Lazard Freres has been hired to look for the investor.

In May last year, airBaltic share capital was increased to EUR 256.473 million. According to an agreement signed by the Latvian government and German investor Ralf Montag Girmes, the investor made an investment worth EUR 52 million in airBaltic, while the state invested EUR 80 million, capitalizing the loan from the Treasury. As a result, the Latvian state held 80 percent shares in airBaltic and Montag Girmes had 20 percent through company Aircraft Leasing 1.

In April this year, Danish businessman Lars Thuesen became the sole owner of Aircraft Leasing 1, thus becoming an indirect holder of a 20 percent stake in airBaltic.

airBaltic posted EUR 1.2 million in profit last year and achieved EUR 286 million in turnover.

airBaltic serves around 60 destinations from its home base in Riga, Latvia.

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