airBaltic bondholders back postponement of interest payments worth €27.5 million
Bondholders of Latvia's national airline airBaltic have agreed to defer two upcoming interest payments by adding them to the bonds' principal instead of paying cash. The move buys the airline extra flexibility while talks continue on a larger €225 million bridge financing package.
Bondholders of Latvia's national carrier airBaltic voted on Monday to capitalize rather than pay out in cash the two nearest interest payments due on 14 August and 14 November, according to a company filing to the Euronext Dublin stock exchange. The deferred amounts will instead be added to the bonds' principal value.
Bondholders representing more than a quarter of the total bond value took part in the meeting, and over three-quarters of those voting approved each of the proposed resolutions. Each quarterly interest payment normally amounts to roughly €13.7 million, meaning the combined relief from the two deferred payments exceeds €27 million.
Alongside the payment deferral, bondholders also approved a temporary waiver of the minimum liquidity requirement set out in the bond terms, valid until November 2026, as well as eased requirements for the bond servicing reserve account. Certain notice periods and quorum rules for future bondholder meetings were also amended.
Larger financing package still under negotiation
The meeting did not address airBaltic's separate plan to raise €225 million in bridge financing, part of which would involve converting existing bonds into equity. That item was not on Monday's agenda, and talks on its terms are ongoing, with bondholders to be updated separately once details are finalized.
The airline stressed that the approved decisions ensure business continuity and that its flight schedule remains unchanged, so passengers can continue booking future travel with confidence.
As previously reported, the Latvian government recently gave conceptual backing to several steps aimed at stabilizing airBaltic's finances, including a possible state purchase of up to €30 million in new bonds and the conversion of existing state claims into equity. Parliament still needs to approve these measures. The Latvian state currently holds 88.37% of airBaltic shares, Germany's Lufthansa holds 10%, with the remainder split among other investors.
