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Strautins: intention to save airBaltic is a normal solution

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU

Peteris Strautins

57.6 million lats intended to save the Latvian national airline airBaltic is not too much, given that the company is crucial not only for tourism, but the whole economy in general, says Peteris strautins, DnB Nord bank economist.

The decision to rescue airBaltic is an absolutely normal solution, he told in an interview to Latvijas Radio. The economist hopes that the necessary agreement will be reached and the private shareholder will go for it as well.

Strautins highlights airBaltic’s role in the economy, stressing that investors care for being able to fly to, for example, their factory in Latvia from numerous countries.

He adds that the state could go on owning the airline, since it has already proved good management skills in such companies as Latvian State Forests and Latvenergo.

The news portal BNN already reported, on September 29, airBaltic shareholders’ meeting announced a break after agreeing that the airline’s president Bertolt Flick would step down and the shareholders’ agreement, which was widely regarded as unbeneficial for Latvia, would be terminated.

The airline’s shareholders will continue the meeting after an agreement on share capital increase conditions is signed by the shareholders – the state of Latvia and Baltic Aviation Systems (BAS). This might be done in the next few days, Anrijs Matiss, state representative and the Transport Ministry’s State Secretary, and Inga Piterniece, BAS represenatative, announced after the meeting.

Commenting on airBaltic’s board members selection process, Matiss said no candidates were nominated yet. Several potential candidates have been addressed, however, their consent has not been received.

It should be noted that there are still unsolved technical problems with fund attraction for boosting airBaltic’s share capital.

Earlier today, September 29, the national airline airBaltic shareholders failed to start the meeting at the first attempt.

Matiss told that currently an agreement has been attained through negotiations that Flick will leave airBaltic’s board. It was also decided to terminate the shareholders’ agreement.

It was previously reported that the government reached a decision on airBaltic future management at a close meeting. It stipulates investments of 57.6 million lats in the national airline, if its minority shareholder (SIA Baltic Aviation Systems) fulfills the set conditions.

The state funding will be provided as the State Treasury’s loan with the possibility of at least partial capitalization. BAS investment will be proportional to its owned shares in airBaltic – around 50 million lats. The money is intended for covering operating losses this year and partly in 2012. There are also plans to invest in the airline’s fleet modernization.


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