airBaltic Files for Legal Protection, Continues Operations

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Latvian national airline airBaltic is today filing for legal protection to continue operations in its network of airports served in Europe, Middle East, and Russia/CIS.

For the past six months, the management of airBaltic has informed about the necessity of a capital increase. Baltic Aviation Systems (BAS), the private shareholder of airBaltic, has declared its willingness to cover the capital increase fully, or proportionally together with the government of Latvia. The government of Latvia as a minority shareholder in the airline has neglectfully and repeatedly delayed any decisions regarding the capital increase. In order to come out of a stalemate, the private shareholder BAS agreed to all government conditions on September 16. On September 20, the government again did not take a decision to participate in the capital increase of the airline, or to allow BAS to increase the capital unilaterally, but suddenly and surprisingly announced potential sale of its shares in the airline.

According to the procedure of legal protection in Latvia, the Board of airBaltic has submitted to the court a plan for continued operations, to be approved by the court. As a consequence, the Latvian government as shareholder will not be able to block any decisions in the airline. As part of the legal protection procedure, an Administrator is nominated, to be approved by the court and to be responsible for the legal protection plan that all parties have to follow, including the shareholders, the management, and the Supervisory Board. The management of airBaltic will not change during the period of legal protection, and all the creditors of the carrier will receive the outstanding debts.

The Board of airBaltic will continue operations of the airline. Should the airline be forced to make any cancellations, we will inform our passengers by separate notice as early as possible. We apologize to our passengers for any potential future inconvenience!

The Board of airBaltic is currently in negotiations with all the stakeholders of the airline. All of them, except the government of Latvia, are ready to support the airline in the future. The legal protection plan, approved by the court, must be obeyed and will help to overcome the blockage created by the government of Latvia as a minority shareholder.

Yours,

Bertolt Flick
President and CEO
airBaltic

AirBaltic press release, Riga. 21.09.2011

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Air Baltic operates a fleet of 34 aircraft, comprising six Boeing 737-500s, eight Boeing 737-300s, two Boeing 757-200s, 10 Fokker 50s and eight Bombardier Q400s.

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airBaltic Shareholders agree to inject over EUR 150 million

Today the shareholders of Latvian national airline AirBaltic agreed in their meeting to finalise technical details until October 4 for the injection of EUR 153 million in new capital financed by its two main shareholders, the Latvian government and Baltic Aviation Systems (BAS).

It was announced this Tuesday that the government of Latvia and BAS reached agreement and would jointly inject the capital into airBaltic. The Latvian government will secure EUR 81.9 million (LVL 57.6 million), while the private investor BAS will secure EUR 71.1 million (approximately LVL 50 million).

Today’s shareholder meeting has taken a formal pause and will continue on October 4 to finalize the capital increase, after the technical details are fully agreed by the shareholders.

Source: Air Baltic

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airBaltic now state-owned and for sale

Latvia has taken complete ownership of formerly part state-owned airline airBaltic after the collapse of a local bank and is looking for a strategic investor, according to the former Soviet Republic's Transport Ministry.

This follows the collapse of a bank which held a minority stake in the airline after earlier financial difficulties. Back in September the State said that it would support what is effectively the national airline. The Transport Ministry said in a statement that it decided to take the airBaltic shares to protect the state's interests.

Established with the help of SAS in 1995 airBaltic, operating as a low-cost airline, has had a chequered history and now operates a fleet of 14 Boeing 737s, two Boeing 757s, eight Bombardier Q400s and nine Fokker 50s. It serves some 74 destinations.

Source: AERBT and www.airbaltic.com