RIGA - Latvia's national carrier airBaltic should go public after the deal with Germany's Lufthansa is finalized, Transport Minister Kaspars Briskens (Progressives) told LETA.
The minister said that it makes sense to launch the IPO once Lufthansa has acquired 10 percent of airBaltic's convertible shares, so that it can participate in the IPO as a full shareholder.
The transaction documents and the prospectus, the document presented to investors, already contain a clear message about the Lufthansa deal, so investors can draw their own conclusions, Briskens said.
In his words, airBaltic might go ahead with the IPO in the second quarter of 2025, closer to the summer. "We hope that both macroeconomic and geopolitical factors will have improved by that time, because these factors delayed a potential IPO at the end of last year," the minister said.
However, if there is a recommendation that said time period is not favorable for the IPO, it will be put off until next half-year, the end of this year, Briskens said.
He added that various scenarios are being weighed, including other ways to raise capital.
As reported, an agreement has been reached and a contract has been signed with Lufthansa, the strategic investor of the Latvian national airline airBaltic, Prime Minister Evika Silina (JV) said on Twitter on Wednesday.
airBaltic said in a press statement the Transport Ministry, airBaltic, and Lufthansa Group have signed an agreement, according to which Lufthansa Group will invest EUR 14 million in airBaltic for a minority stake, and Supervisory Board seat.
In return for its investment, Lufthansa Group will receive a convertible share granting a 10 percent stake, which will be issued at a subscription price of EUR 14 million and converted into ordinary shares upon a potential IPO of airBaltic. After IPO, the size of Lufthansa Group’s stake will be determined by market pricing of the potential IPO, with Lufthansa Group’s holding amounting to no less than 5 percent of airBaltic.
The transaction builds on the existing strategic partnership between Lufthansa Group and airBaltic. Lufthansa Group will also appoint a Supervisory Board member upon closing of the investment. The closing of the transaction is planned for the second quarter of 2025, and is subject to antitrust review.
airBaltic carried 5.2 million passengers in 2024, which is an increase of 13 percent against a year before, while the number of the airline's flights rose 7 percent year-on-year to 47,000.
In 2023 airBaltic's audited turnover was EUR 664.289 million, up 33.2 percent on 2022, and the company made a profit of EUR 33.852 million, compared to a loss the year before.
The Latvian state owns 97.97 percent of airBaltic's shares, while the financial investor, Danish businessman Lars Thuesen's Aircraft Leasing 1, owns 2.03 percent.
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