airBaltic rescue plan set to reduce Latvian state's influence in airline
A financial stabilization plan for airBaltic backed by the Saeima involves restructuring debt and raising a new €225 million loan, which will shrink the ownership stakes of the Latvian state and Lufthansa. Latvian broadcaster TV3's programme "Nekā personīga" reports the state may need to invest further funds later to retain influence.
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A financial stabilization plan for airline airBaltic, backed by Latvia's parliament (the Saeima), involves a major restructuring of the company's debt along with raising a new €225 million loan. The plan was reported on Sunday by TV3's programme "Nekā personīga".
Bonds converted into shares
A central part of the plan is converting the airline's existing bonds into company shares. As a result of this conversion, the ownership structure will shift: both the Latvian state and German airline Lufthansa will see their current stakes in airBaltic diluted and reduced compared to their present holdings.
More state funding may follow
According to the programme, after the planned new share issue, the Latvian state will likely need to inject additional funds into the company if it wants to retain meaningful influence over airBaltic's future decisions. This suggests the stabilization process could ultimately require larger expenditures from the state budget than initially expected.
Overall, while the plan addresses airBaltic's financial troubles through debt restructuring and new borrowing, it simultaneously reshapes the balance of power among the company's largest existing shareholders.
