airBaltic bailout deal signed; Flick steps down
06.10.2011, 10:20The Latvian government has signed an agreement between airBaltic's minority shareholders Baltijas Aviacijas sistemas (BAS) and Taurus Aset Management, the company's creditors Latvijas Krajbanka, Bankas Snoras and AKB Investbank and two other companies: Transatlantic Holdings Company S.A. and KD Jet.
Transport minister Uldis Augulis, who signed the agreement from the government's side, did not comment what role each company has in the process. Still, KD Jet is the only newcomer: Transatlantic Holdings Company S.A. was previously named as the buyer of a 12.5% share in airBaltic. To this very day, the purchase is disputed, though.
The bailout deal means that government will have to invest LVL 57m in the airline. In return, it regains control over the airline, as it has submitted to its demands: the shareholder agreement, which previously gave a significant and disproportional advantage to BAS is no longer in force.
There is another government demand that has been satisfied. On 4 October, the CEO of airBaltic Bertolt Flick announced that he is stepping down from his post. In an emotional goodbye letter, he compared the airline with a child, noting that he has been with it from the very beginning.
The government has already named new foster parents for airBaltic: the company's new board consists of Laila Odina, COO of the airline, and Vitolds Jakovlevs, a former investment banker. It is still looking for a board chairman.
Still, Flick is not leaving: he remains the co-owner of BAS.
Both the government and airBaltic are now optimistic about the future of the airline, with Augulis claiming that it is safe to buy airBaltic tickets for Christmas flights and PM Valdis Dombrovskis promising that there will be no more suddenly cancelled flights.