Government buys SAS shares in Estonian Air

TALLINN -- The Estonian government has reached a final agreement with SAS to buy out the company's stake in national airline Estonian Air.

Economy Minister Juhan Parts said the sale would result in the appointment of a new council, which the minister said would likely be headed by investment banker Joakim Helenius. Helenius had previously said that if appointed to the position he would be able to give the airline a more defined strategy.

"Estonian Air has been lacking a clear strategy until now, mainly because of differences of opinion in the airline's owners. Now  that the state has become the controlling shareholder of Estonian Air, it should be easier for the airline to adopt a clear strategy and position itself much better."

SAS had a 49% stake in Estonian Air, which the government is set to buy all but 10% of for more than $28 million. 

Estonian Air will have an option to buy SAS's remaining stake and SAS has the option to sell its stake at fair market value after four years.

The transaction is conditional upon Estonia parliamentary approval and is neutral to profit and liquidity of the SAS Group.