The prosecutor’s office has found no illegalities with Latvian government’s decision to support the reduction of capital of Latvian national airBaltic airline.
The Prosecutor General’s Office has completed its investigation of the decision by the Cabinet of Ministers to support the reduction of the capital of “Air Baltic Corporation” by EUR 571.293 million and the diversion of this amount towards coverage of losses accumulated in previous years, as LETA was informed by the prosecutor’s office.
The conclusion reached by the Prosecutor General’s Office is that the reduction of capital lowers neither the value of airBaltic nor the number of shares owned by the state.
Similarly, airBaltic’s obligations to the state remain unchanged. The reduction of the share capital by EUR 571.293 million to cover losses accumulated in previous years does not interfere with the fulfilment of the conditions on which state aid has been provided and on which airBaltic must implement the exit from state aid.
The investigation carried out by the prosecutor’s office confirms that the reduction of the share capital is related to the need to simplify the share structure by establishing a single class of all shares and reducing the nominal value of shares.
Reducing the nominal value of the shares and shifting the resulting difference in the value of the shares to cover losses improves the financial situation of the company, it shall be indicated to the institution. In turn, from the point of view of the state interest, the reduction of the equity capital and the resulting transfer of the difference in the value of the shares to cover losses improves the liquidity of the shares, which is essential for the successful implementation of the exit of airBaltic from the state aid provided to the airline to overcome the consequences of Covid-19.
“By making the decision to support the reduction of the capital, the Cabinet of Ministers acted in accordance with its competence,” the statement from the prosecution office mentioned.
The Latvian national airline “airBaltic” group has worked with a loss of EUR 48.503 million in nine months this year, in contrast to the profit in the relevant period a year earlier, Martin Gauss, President and CEO of “airBaltic”, said on Thursday in a call to investors of “airBaltic”.
In turn, the turnover of the airBaltic Group in the nine months of 2024, compared to the respective period last year, increased by 12.7% and amounted to EUR 575.342 million.
airBaltic last year worked for nine months with a turnover of EUR 510.632 million and a profit of EUR 9.122 million.
airBaltic carried a total of 4.536 million passengers last year, 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 EUR 664.289 million, which is an increase of 33.2% compared to 2022, and the company made a profit of EUR 33.852 million as opposed to losses a year earlier.
The audited turnover of airBaltic last year was EUR 664.289 million, which is an increase of 33.2% compared to 2022, and the company made a profit of EUR 33.852 million as opposed to losses a year earlier.
The Latvian state owns 97.97% of airBaltic shares, while financial investor, Danish entrepreneur Lars Tussen’s Aircraft Leasing 1 owns 2.03%.