Previously, “airBaltic” executive director Martins Gauss stated that after the announcement of the investor, the public will have a “positive surprise”.
Valainis agrees with Gaus and emphasizes that the investor is a well-known company and it is important whether it will be ready to come with all the conditions set by the government.
It has already been announced that the national airline of Latvia “airBaltic” wants to raise approximately 300 million euros in the initial public offering (IPO), the chairman of the board of “airBaltic” Klāvs Vasks said at the press conference on Tuesday.
He pointed out that in order for “airBaltic” to realize all the tasks and goals set in the business plan, the company wants to reach the target amount of approximately 300 million euros during the IPO process, without attracting additional state support.
Vasks also noted that the amount by which the share capital of “airBaltic” will be reduced, namely EUR 571.293 million, looks large, but the amount of capital does not change the value of the company.
The financial director of the airline, Vitold Yakovlevs, also explained that the reduction of the share capital is a mathematical process in which four categories of shares with different nominal values are equated to the lowest nominal value, namely ten cents. He emphasized that by choosing such a solution, the shareholders’ percentage participation in the company’s capital will not change.
“If the nominal value of the shares were equated to a higher price, the percentage ratio between the shareholders would change – the state would not own 98%, but about 94%, so the minority shareholder would get a larger share and the right to receive dividends from this process,” explained Jakovlev.
Vasks added that the true value of the company will be determined by the market. “After the consolidation of the share classes, the shares will be able to be quoted at a higher value on the stock exchange. If this were not done, the value of the new shares on the stock exchange could be a few cents or very little,” he said.
Also, Vasks mentioned that the company plans to carry out an IPO this year, however, it may be affected by the situation in the aviation industry and also by the global situation. “At the moment, nothing has been sold. The company is preparing for an IPO in order to be able to freely enter the financial market. This has nothing to do with the existing value of the company or state investment,” stressed Vasks.
Gauss said the state has invested 526 million euros in the company over 29 years, which the public considers “taxpayers’ money,” and that is correct, but the company has paid more than 400 million euros in taxes to the state.
The Minister of Transport Kaspars Briškens (P) also noted that the state gains both from the paid taxes and from jobs, as well as from the provided connectivity. “For the company, successfully issuing shares in the IPO process, we expect that, with the state also retaining a minority share, the company will be profitable and the state will continue to receive indirect benefits and financial benefit if the company works profitably,” said the minister.
Commenting on how the European Commission (EC) looks at the “write-off” of these losses, the minister said that one of the government’s decisions is to evaluate in detail state aid investments in the amount of 250 and 90 million euros during the Covid-19 pandemic. Accordingly, when engaging consultants, both the state and the company want to gain full confidence that such a step meets the conditions of state aid.
Brišken added that the information so far from the company and the analysis of the consultants involved show that the listing of shares on the stock exchange is an appropriate way to fulfill these state aid conditions. “The story is about the level at which the state reduces participation to compensate for the investments that have been made during the pandemic,” said the minister.
He also explained that at the end of August, the government unanimously supported the plan proposed by the company, but at the same time set several important conditions for the state, including that the state must maintain at least 25% of the company’s capital plus one vote, or the blocking minority, the state cannot financially participate in the IPO, and it is also important that a strategic investor would be attracted, with whom negotiations are ongoing for several months.
Also, the minister acknowledged that communication is important in this matter, so more attention will be paid to it in the future.
It has already been announced that the government agreed on Friday, August 30, in the closed part, that the state should retain at least 25% plus one share in the company’s capital after the IPO of “airBaltic”.
Briškens explained that currently there are no negotiations with the strategic investor of “airBaltic” about the sale of a controlling stake, but about obtaining a minority stake before the IPO or on the way to the IPO, as well as possibly participating in the IPO. “The state condition agreed by the government on Friday is that the state should retain at least 25% plus one share after the IPO, which is this blocking minority,” said the minister.
In preparation for the IPO, the share capital of “airBaltic” will be reduced by 571.293 million euros, as well as the existing share structure of the company will be simplified.
According to the regulations of the share capital reduction, the share capital of “airBaltic” so far is 596.473 million euros, thus the share capital of “airBaltic” after the reduction will be 25.179 million euros.
At the same time, the nominal value of all shares of categories A, B and C will be reduced to ten cents and EUR 571.293 million will be directed to cover the accumulated losses of previous years. No remuneration or compensation will be paid to the shareholders in connection with the reduction of the nominal value of the shares of these classes.
It was also reported that “airBaltic” transported a total of 4.536 million passengers last year, which is 35.7% more than in 2022, and made 44,100 flights, which is 18.3% more than the year before.
The audited turnover of “airBaltic” last year amounted to 664.289 million euros, which is 33.2% more than in 2022, and the company also made a profit of 33.852 million euros, in contrast to losses a year earlier.
The Latvian state owns 97.97% of “airBaltic” shares, while “Aircraft Leasing 1” owned by financial investor, Danish businessman Lars Tūsen – 2.03%.
2024-09-05 11:50:28