Saeima backs extension of state loan repayment for airBaltic
Latvia's parliament on Thursday agreed to extend the repayment deadline for the state loan to national airline airBaltic until the end of the year and approved the purchase of up to €30 million in additional bonds. Lawmakers also allowed the company's debt to the state to potentially be converted into shares.
The Saeima, Latvia's parliament, approved a decision on August 20 that adjusts the terms of state financial support for national carrier airBaltic. Lawmakers backed extending the repayment deadline for a previously issued state loan, giving the airline until the end of this year to repay the debt.
Additional bond investment
Alongside the extended deadline, parliament authorized the state to purchase additional airBaltic bonds worth up to €30 million. This step would allow the state to increase its financial involvement in the company if needed.
Interest capitalization and debt-to-equity option
The Saeima also agreed that interest payments on existing bonds could be capitalized, meaning added to the principal amount rather than paid out separately. In addition, lawmakers approved the possibility that airBaltic's obligations to the state could in the future be converted into company shares, which would mean an increase in the state's stake in the airline.
The decision reinforces the state's role as the airline's main shareholder in supporting its finances as the company continues its development and stabilization process.
