Wednesday, August 17, 2011

AirBaltic Needs Capital After $70 Million Loss, Latvia Says

AirBaltic AS, the Latvian airline that’s majority-owned by the state, will need fresh capital following a loss of about 34.2 million lati ($69.8 million) last year, the Transport Ministry said. AirBaltic’s financial situation is “serious,” the ministry said in a statement today. The Latvian airline has the lowest core capital ratio of all European airlines and needs cash to continue to operate and develop, it said.

The company’s supervisory council yesterday called for a recapitalization of at least 60 million lati, according to the ministry.  Latvian Prime Minister Valdis Dombrovskis said it was difficult to support recapitalization without knowing what happened to 15 million lati the state invested in the company’s capital previously, the Leta newswire reported.   Transport Minister Uldis Augulis’s suitability for his position will be reviewed if the company’s shareholder agreement isn’t revised and the finances solved, Dombrovskis said, the Riga-based newswire reported.

The Baltic country will hold parliamentary elections on Sept. 17.  The airline’s offices were raided in May amid a criminal probe by the country’s anti-corruption bureau. The Latvian state owns 52.6 percent of AirBaltic while Baltic Aviation Systems has 47.2 percent. 

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