airBaltic court hearing to decide on remaining €35 million financing tranche
The next US court hearing in airBaltic's Chapter 11 restructuring will determine allocation of the remaining €35 million from its first financing tranche, alongside approval of the overall €350 million funding structure.
airBaltic's Chapter 11 restructuring process continues in a US court, with the upcoming hearing set to decide on the remaining €35 million owed to the airline from its first financing tranche. That tranche totals €175 million, of which €140 million has already been received, with the balance to follow once a final court order is issued.
Financing structure
The overall debtor-in-possession (DIP) financing plan totals up to €350 million, though access to the next tranches of €125 million and €50 million depends on further court rulings and compliance with restructuring conditions. Of the €140 million already received, nearly €79 million is earmarked for buying out eight aircraft and seven engines. The financing was arranged by SVP and is backed by Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners, carrying an interest rate of roughly 12% plus fees of up to €52.5 million. An earlier plan to raise funds from bondholders at a 25% rate has been dropped, and a bondholder group, the Ad Hoc Group, has filed objections to the new financing terms.
Other matters before the court
The court will also rule on permission to maintain key aviation agreements, sign new critical contracts, continue insurance policies and customer loyalty programs, preserve banking and payment systems, keep paying taxes and state fees, and continue employee salaries and benefits.
The company stresses that flights and customer service continue as normal, with existing tickets and bookings remaining valid. The restructuring is expected to conclude by mid-2027 with a reorganization plan requiring court approval.
Financial results
airBaltic's group revenue rose 4.2% last year to €779.3 million, while losses fell 2.7-fold to €44.3 million. The airline carried 5.2 million passengers, up 1% year-on-year. Lufthansa became a shareholder last summer and now holds 10% of shares, with the Latvian state retaining 88.37%.
