German national Lufthansa airline is considering acquiring shares of Latvian national airBaltic airline before the planned initial public offering (IPO), as reported by Bloomberg with reference to sources.
Negotiations are in early stages, and no decision regarding any investments has been made so far, anonymous sources say.
Lufthansa, airBaltic and Latvian Ministry of Transport refrain from commenting on the situation at this time, Bloomberg reports.
Lufthansa Group already owns several national airlines – Austria’s “Austrian Airlines”, Switzerland’s “Swiss”, and Belgium’s “Brussels Airlines”.
In July, the European Commission authorised Lufthansa to acquire a 41% stake in Italian national airline “ITA Airways”. The agreement provides that Lufthansa may subsequently increase its shareholding or even acquire all shares in ITA Airways.
As previously reported, On the 30th of August, the Latvian government agreed during a meeting behind closed doors that the state must retain at least 25% plus one share in the company’s capital after the initial public offering (IPO) of airBaltic shares. Minister of Transport Kaspars Briškens explained that there are no ongoing negotiations with airBaltic’s strategic investor in regards to the sale of the controlling package of shares.
The potential investor, according to Minister of Economics Viktors Valainis, is “a well-known company”.
LTV programme De Factor reported on Sunday, 8th of September, that the plan is to sell 10% of airBaltic shares to a strategic investor.
In preparation for IPO, airBaltic’s capital will be lowered by 571.293 million euros. The structure of the airline’s shares will be simplified as well. The rules for reducing the share capital state that the previous share capital of airBaltic is 596.473 million euros, thus the share capital of airBaltic after the reduction will be 25.179 million euros.
Last year, airBaltic carried a total of 4.536 million passengers, an increase of 35.7% compared to 2022, and 44 100 flights, an increase of 18.3% compared to the year before.
The audited turnover of airBaltic last year was 664.289 million euros, which is an increase of 33.2% compared to 2022, and the company made a profit of 33.852 million euros as opposed to losses a year earlier.
The Latvian state owns 97.97% of airBaltic shares, while the financial investor Aircraft Leasing 1, which is owned by Danish entrepreneur Lars Thuesen, owns – 2.03%.