Posted on: 21 September 2011 by Ross McSweeny
Latvian national airline airBaltic has filed for legal protection to continue operations in its route network.
A letter from CEO Bertolt Flick states, “For the past six months, the management of airBaltic has informed about the necessity of a capital increase. Baltic Aviation Systems (BAS), the private shareholder of airBaltic, has declared its willingness to cover the capital increase fully, or proportionally together with the government of Latvia.
“The government of Latvia as a minority shareholder in the airline has neglectfully and repeatedly delayed any decisions regarding the capital increase. In order to come out of a stalemate, the private shareholder BAS agreed to all government conditions on 16 September. On 20 September, the government again did not take a decision to participate in the capital increase of the airline, or to allow BAS to increase the capital unilaterally, but suddenly and surprisingly announced potential sale of its shares in the airline.
“According to the procedure of legal protection in Latvia, the Board of airBaltic has submitted to the court a plan for continued operations, to be approved by the court. As a consequence, the Latvian government as shareholder will not be able to block any decisions in the airline.
“As part of the legal protection procedure, an Administrator is nominated, to be approved by the court and to be responsible for the legal protection plan that all parties have to follow, including the shareholders, the management, and the Supervisory Board. The management of airBaltic will not change during the period of legal protection, and all the creditors of the carrier will receive the outstanding debts.
“The Board of airBaltic will continue operations of the airline,” continues Flick. “Should the airline be forced to make any cancellations, we will inform our passengers by separate notice as early as possible. We apologise to our passengers for any potential future inconvenience.
“The Board of airBaltic is currently in negotiations with all the stakeholders of the airline. All of them, except the government of Latvia, are ready to support the airline in the future. The legal protection plan, approved by the court, must be obeyed and will help to overcome the blockage created by the government of Latvia as a minority shareholder,” Flick concludes.