Latvian government to airBaltic: either Flick or us
24.08.2011, 15:16Late on 23 August, the Latvian government agreed to give the Latvian national carrier airBaltic some of its badly-needed cash, reports news2biz.com
There is, however, one catch: if airBaltic is to receive any government cash, its management – including its iconic president and CEO Bertolt Flick – has to go.
airBaltic's losses in 2010 reached LVL 34.2 million and, to keep the company airborne, Flick has offered to increase its basic capital by LVL 63.68m. Through his company Baltijas Aviacijas sistemas (BAS) Flick is also one of the co-owners of airBaltic, and he has announced that BAS could either buy more shares in airBaltic or sell them.
The government believes that it would not get a fair price if it sells its shares, so it has decided to raise airBaltic's basic capital.
However, even if Flick leaves the management, his company BAS would still remain the shareholder. More importantly, BAS owns a number of key assets in airBaltic – even including its brand. The government has not yet decided whether to buy the BAS' share, but, if BAS stays, government aims to increase its influence in the carrier.