LETA: “airBaltic” shareholder agreement has been signed with Montag-Girmes

February 4, 2016

Riga, 4th of February, LETA. Today “airBaltic” (an airline) shareholder agreement has been signed between Latvian government and German businessman Ralf-Dieter Montag-Girmes, agency LETA was informed by the “airBaltic” representatives.

In accordance with this agreement 132 million euro will be invested in Latvian airline in order to modernize their fleet and to realize “Horizon 2021” business plan.

In accordance with government accepted deal, the German investor will hold 20% stake in airline after deal completion, but residual shares will remain with the Latvian state. The Ministry of Transport reminds, that the investment and “airBaltic” equity increase had been approved by the Saeima on the 3rd of December in 2015. The deal was approved with a condition, that “airBaltic” and its related companies are prohibited to purchase, lease or employ the machinery, which had been produced by military complex companies or its associates, which are subjects to European Union or international sanctions (also ratified by Latvian state).

Montag-Girmes explains, that “airBaltic” is “an eminent airline with unique market niche, Riga being their main transport hub in the Baltics and with great future opportunities in Tallinn and Vilnius”. He is delighted, that the agreement had been made, thus it is possible to undertake “airBaltic” development plan.

Kaspars Ozoliņš, State Secretary of the Ministry of Transport, informs, that “airBaltic” will invest received funds in new airplane acquisitions rather than leasing, therefore, “airBaltic” will be able to save on expenses and improve passenger service. It will increase Latvian air connections, promote economic development and ensure additional job creation.

Montag-Girmes and Ozoliņš press briefing is scheduled today at 16:00 in “airBaltic” office in Riga International Airport.

As it was reported, at the end of previous year the government decided to support “airBaltic” investor presented by “Prudentia”. It is expected that the investor, German businessman Montag-Girmes, will invest 52 million euro, but the Latvian state – 80 million euro. The additional equity in Latvian airline of 132 million euro will promote business plan and fleet modernization.

Saeima agreed to allocate 80 million euro to “airBaltic”. Parliament decision intends allowing the minister of finance, in accordance with government resolution, to increase appropriation for the Ministry of Transport to 80 million euro, in order to increase “airBaltic” equity after shareholder agreement has been signed.

At the same time the decision of the Saeima, taking into account apprehensions, that Montag-Girmes may be interested to enhance “airBaltic” fleet with Russian “Sukhoi” airplanes, includes a condition, that “airBaltic” and its subsidiaries are not allowed to purchase, lease or employ the production, which had been produced by military complex companies or its direct and indirect associates, which are subjects to European Union or international sanctions (also ratified by Latvian state).

Already since December the Ministry of Transport, shareholder of national airline “airBaltic”, was ready to sign the shareholder agreement with Montag-Girmes, though the potential investor had not informed yet about the contract signing date. At the end of December the airline explained, that the agreement with “airBaltic” new investor Montag-Girmes will be signed in January, because prior signing procedure “airBaltic” is still willing to settle all issues regarding the order of “Bombardier CS300” airplane.

Martin Gauss, chief executive officer of “airBaltic”, explained, that the company was able to reach significant results in the past years, and because of additional investment it is now possible to concentrate on expansion and consolidation within Baltic aviation market. The new capital will be employed, in order to invest in new airplanes rather than leasing them, thus providing “airBaltic” with an advantage on cost side, which is the most fundamental part of “Horizon 2021” business plan.

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