The Success Story of National Airline airBaltic
In 2011 the national airline airBaltic experienced financial difficulties. There were conflicts between the shareholders, auditors refused to approve the company's annual report and the largest creditors threatened with insolvency. Prudentia was employed by the Latvian Government, which is the main shareholder of airBaltic, to advise them in solving the issues in the company.
Prudentia consulted the state in negotiations with the private investors of airBatic, the International Monetary Fund and the European Commission, as Latvia till end of 2011 was in special IMF and EC bailout program. We were solving issues with the largest creditors and, on behalf of the government, looking for a new management for the company.
As a result, in October 2011 issues related to the creditors and shareholders were solved, the restructuring the business model of airBaltic had begun and 138 million euro large funding from private investor and the state was attracted.
With that, however, Prudentia's work was not over yet. We continued advising the state in attracting strategic investors and to strengthen airBaltic's business strategy.
In November 2012 the Directorate-General for Competition (DG COMP) started investigating the possible illegal state aid to airBaltic. In cooperation with the law firm Clifford Chance, Glimstedt (today Ellex) and aviation advisers from Aviation Strategy & Concepts, Prudentia consulted the Latvian government and airBaltic during this investigation process.
In June 2014 European Commission and airBaltic agreed on a restructuring plan and the State's investments. With that the investigation was over.
In November 2014 airBaltic's 75 million euro loan portfolio of MAS Latvijas Krājbanka and MAS Snoras bankas was restructured.
After 4 years of intensive work finally in October 2015 Prudentia attracted a private investor to the company - Ralf-Dieter Montag-Girmes from Germany. In the end he invested 51 million euros in the company and the state of Latvia invested 80 million euros. The deal was closed in May 2016 and airBaltic's equity was increased to 256,5 million euros.
Kārlis Krastiņš: After the deal was closed, airBaltic equity increased to 256.5 million euros.
During the period from 2011 till 2016, Prudentia has attracted financing to airBaltic from private investors and the state in amount of 269 million euros. airBaltic has become the leading airline in the Baltics - it is led by a professional team and they continue to modernize their fleet with new Bombardier CS300 airplanes.