Transport Minister Eugenijus Sabutis says that when deciding on the Latvian national airline, "Air BalticLithuania is awaiting an official offer and specific conditions from the government of a neighboring country to acquire shares.
He told BNS on Wednesday that the Latvian Ministry of Transport and Communications intended to send official proposals to potential Lithuanian and Estonian investors regarding their possible participation in the airline's capital before Air Baltic's initial public offering (IPO).
"Until we have a normal public offer with conditions, we have nothing to answer, because it needs to be evaluated. We are thinking about how we could or could not do it, but we do not have a "yes" or "no" answer at the moment, because we have not received an official normal offer," E. Sabutis told BNS.
"If there is something attractive and good, you can always think about it," the minister said.
He said that it is too early to say under what conditions Lithuania would agree to participate in the capital of Air Baltic.
"We can come up with a lot of conditions, but we have to see what the (Latvian – BNS) side offers, because we are not asking to buy, but they are asking us to buy. (…) We are not rushing to buy without knowing what it should be. And there is no initiative on our part in this case either," the minister said.
At the end of November, E. Sabutis, who was still a candidate for the post of Minister of Transport at the time, said in an interview with BNS that he was rejecting the possibility of Lithuania acquiring shares in Air Baltic.
The fact that Lithuania is considering the possibility of acquiring shares was announced last January by the previous Minister of Transport and Communications. Marius Skoudis. Then he said that possible terms of the deal were being discussed so that part of the planes would be based in Lithuania.
The Latvian Ministry of Transport and Communications announced on Wednesday that potential partners from Lithuania and Estonia – governments and airports – will be offered a structured participation mechanism that will strengthen regional cooperation and increase the investment attractiveness of the Air Baltic IPO.
The agreement signed by the Latvian government with Lufthansa Group at the end of January stipulates that the German civil aviation flagship, which will become a strategic investor in the Latvian airline, will invest 14 million euros in Air Baltic. In exchange, Lufthansa Group will receive a convertible share equivalent to 10 percent of Air Baltic's share capital, as well as a seat on the company's supervisory board.
Later, after the planned Air Baltic IPO, this share will be converted into ordinary shares, and the share held by Lufthansa Group will be determined by the market price.
In February, the Latvian Register of Companies registered a reduction in Air Baltic's share capital by almost 24 times - from 596,473 million to 25,179 million euros, as well as significant changes to the share capital structure. The company indicated that the freed up funds will cover losses from previous years.
Air Baltic has postponed its IPO, which was planned for the second half of 2024, to this year, explaining this by the "need for appropriate market conditions."
The Latvian government, which now owns almost 98 percent of Air Baltic's shares, has previously decided that it must own at least 25 percent and one share of the company after the IPO.
In 2024, Air Baltic suffered a net loss of 118,159 million euros, and in the first quarter of this year, a net loss of 29,348 million euros.
Authors: Giedrius Gaidamavičius, Vilmantas Venckūnas
