AirBaltic CEO Steps Down

October 6, 2011

Latvia’s Prime Minister Valdis Dombrovskis announced this week that the government of Latvia and Baltic Aviation Systems (BAS) reached agreement and would jointly inject the capital into airBaltic. The government of Latvia will secure €82.3 million, while the private investor BAS will secure €71.4 million. Latvian national airline airBaltic will receive €153.7 million in new capital financed by its two main shareholders, the Latvian government and Baltic Aviation Systems, Latvian media reported. In the latest development in airBaltic’s shareholder dispute, the Latvian government on Thursday considered proportionally increasing airBaltic’s capital with the participation of both shareholders (the Latvian state and Baltic Aviation Systems), selling the state-owned shares to BAS, and setting up a new national airline. Latvia owns 52.6% of airBaltic while BAS, the company controlled by Bertolt Flick and Bahamas Taurus Asset Management Fund Ltd, owns 47.2%.

As part of the agreement, president and CEO of airBaltic, Bertolt Flick, agreed to step down. Earlier this week; a legal protection plan filed by airBaltic was rejected by the court, the shareholder meeting to finalize the capital increase is scheduled for Thursday. The board of airBaltic has announced that it has sold 59,110 shares of the company to an undisclosed buyer. The shares were reportedly sold for EUR 9.6m, but the buyer will offer the other shareholders – the Latvian government and BAS – to use their rights of first refusal. The 59,110 shares are the difference between airBaltic’s registered and paid-in capital, which stands at LVL 59,110.

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