Nordica valued at EUR 70 mln before becoming unprofitable

TALLINN – An independent auditor estimated the value of Nordic Aviation Group, or Nordica, to be around 70 million euros before the company started making a loss, David James O'Brock-Kaljuvee, chairman of the supervisory board of the company, told lawmakers on Wednesday.

Eteri Harring, member of the management board of Nordic Aviation Group, told the same meeting of the state budget control select committee of the Riigikogu that the valuation was made on the basis of data for 2022 and a business plan which did not materialize.

Harring noted that the company's financial results deteriorated significantly in the second quarter of this year. This was partly due to external factors, such as delays in the arrival of rental aircraft, staff shortages, problems with aircraft, but the main reason for the losses was that revenue plummeted. The board member pointed out that there were times when as many as four or five planes were grounded and idle.

The parliament's state budget control select committee on Wednesday discussed the business of the state-owned airline in a public sitting. All the parties agreed that the state does not need the airline in its current form and it must be privatized. The representatives of the airline meanwhile emphasized that the company must be stabilized before privatization.

Nordic Aviation Group made a loss of 7.6 million euros in the first six months of this year. In the same period in 2022, it made a profit of 2.1 million euros.

In early August, Minister of Climate Kristen Michal tasked the supervisory board of Nordic Aviation Group with conducting a special audit to assess the company's activities in the period from the beginning of 2020 to the end of July 2023, including to identify the reasons for the negative economic situation. A joint tender by Ernst & Young Baltic AS and the law firm Fort OU has been picked as the winner from among the two offers submitted in the tender for the contract to conduct the special audit.