Estonia increases airline stake

  • 2010-09-22
  • From wire reports

TALLINN - Estonian Economy Minister Juhan Parts and aviation company SAS’s deputy president, Benny Zakrisson, signed on Sept. 17 in Tallinn the sales-purchase transaction for Estonian Air, which has to be approved by the parliament, reports National Broadcasting. With the transaction, Estonia’s stake in Estonian Air grows to 90 percent, while SAS keeps 10 percent. Former small shareholder Cresco is out of the ownership circle of the firm now.

The transaction will automatically come into force after the Riigikogu approves this year’s state budget law amendment, with which the state will channel 280 million kroons (17.9 million euros) from the finance ministry to the economy ministry to increase the share capital of Estonian Air.

Parts said that it is very important that the Riigikogu approve the share capital increase “as quickly as possible. We have taken responsibility for the national aviation company and have to fulfill it.”
Estonian Air and the Canadian aircraft producer Bombardier recently signed a contract according to which the Estonian national carrier will receive the first two CRJ900NextGen aircraft in the beginning of 2011 and the third quarter of 2012. The agreement was a prerequisite for the deal with SAS.

Estonian Air owes SAS 70 million SEK (7.6 million euros), of which the deadline for payment arrives in 2014. The state also has a chance to buy the remaining 10 percent stake in Estonian Air for market value in four years’ time.
Estonian Air continues cooperation with SAS and will be part of the Star Alliance, as before.